How to claim £200 to help with oil heating costs

The cost of heating our homes is at the forefront of most Britons minds right now, but while the government announced a price freeze on gas and electric prices this spring, no such freeze has been announced on heating oil.

And with an estimated 1.6 million relying on heating oil in the UK, it might leave many of those affected wondering why they've been left out in the cold. Oil prices are said to have more than doubled in the last year from £458 for 1,000 litres in September 2021 to £1,008 in September 2022, according to BoilerJuice.

There is however government help with heating oil costs, with customers that rely on heating oil told they should have received a payment of £200 in February 2023.

Those that did not receive the payment automatically can still apply for it. We explain how to do this, plus how the payment will be received as well as looking at a few other ways to potentially lower your oil heating bills.

How is the government helping people with oil heating?

Although not well publicised, there is government help for those who use oil heating.

An Alternative Fuel Payment was announced as part of the energy price guarantee with domestic consumers able to claim a £200 one-off payment if they are not connected to the gas grid and use alternative fuels to heat their homes. This was originally a £100 payment but was doubled to £200 by Chancellor Jeremy Hunt when he announced changes to the scheme. 

"The payment will ensure that a typical customer using heating oil does not face a higher rate of growth in their heating costs since last winter, in comparison to those using mains gas who are supported by the Energy Price Guarantee," it explains on the government website for the energy price guarantee.

This £200 payment is in addition to the £400 energy grant that is available for all energy customers, with the last payment being made in March.

And for those born before 25 September 1956, you will also receive a winter fuel payment of between £100 and £200. This is automatic if you've either claimed it before or receive a state pension. 

If you don't currently receive it and do qualify give the winter fuel payment, call 0800 731 0160, making sure you have your National Insurance number to hand. Those who live in care homes, with others, or abroad may qualify too.

When will I receive my Alternative Fuel Payment?

Those who are not connected to main gas should have received the Alternative Fuel Payment automatically in February 2023. If the payment was not made by 1 March 2023, as stated by the government, there is still a possibility it can be paid but you should contact your supplier.

It's possibly worth pointing out that the Government is handling electricity suppliers (who will be issuing the payment to the customer) this funding in the same month, which could potentially be a fairly tight turnaround.

How do I claim my heating oil payment?

The government confirmed the Alternative Fuel Payment of £200 would automatically be paid to all homeowners not connected to mains gas in February 2023 via their electricity supplier. Obviously, you will need to be signed up with an electricity supplier to be able to receive this payment. 

The government paid your electricity company the £200, who were obligated to automatically deduct the £200 off your electric bill, whether you are in debit, credit or at zero balance. 

Those who pay via direct debit may either have received a one-off "refund" from their electricity supplier or have their direct debits for the year lowered. Where non of the above payment methods are possible, a non-transferable cheque may have been sent instead. 

You should have received a letter from your electricity company confirming that you are to be given the payment, if your home qualified. More information can be found in the government's guidelines published in January.

"This scheme is intended to deliver a one-off payment of £100 [sic] to UK households who are not on the mains gas grid and therefore use alternative fuels, such as heating oil, to heat their homes," the government website explains. "Powers will enable the government to deliver support via electricity bills in both GB and NI, under a similar delivery model to the Energy Bills Support Scheme." 

And yes, its website still does not appear to have updated the payment amount to reflect when it was doubled by Chancellor Jeremy Hunt in his Autumn Statement. But it should say £200 rather than £100.

What if I didn't receive my heating oil grant?

If by 1 March you didn't receive your Alternative Fuel Payment from your energy company (check your balance online as it may be a credit attached to it), you must contact your electricity supplier to check your postcode is definitely on their radar as soon as possible. 

Make sure you get on the case now, as if you don't received the payment by 30th June 2023, it may be returned to the government under the terms of the electricity company not having been able to make the payment. 

You can also apply to receive your payment here via the gov.uk website, in a newly launched form to apply for the Alternative Fuel Payment if you did not get it automatically.

Was everyone entitled to the heating oil allowance?

Only those who are not connected to mains gas were entitled to the Alternative Fuel Payment. Those who are connected to mains gas have instead benefited from government subsidised unit prices through the energy price guarantee scheme.

How else can I lower my heating oil bills?

Those who are new to heating oil may not be aware that heating oil prices fluctuate throughout the year. 

While prices didn't really dip in the summer this year, historically heating oil is typically cheaper in the summer months when demand is lower. Where possible, its advised to always try to buy when demand is low.

You can also save a fair amount of money simply by shopping around. Bare in mind that oil has different qualities too, and lower quality oil will burn quicker while higher quality is more expensive. Don't be afraid to haggle with your oil supplier either, and if you find a cheaper quote on BoilerJuice, tell them and see if they'll match it.

Community buy schemes can be worthwhile, whereby a community coordinates it's oil delivery to buy in bulk and negotiate a lower price. You can potentially find them on neighbourhood apps or Facebook groups. Or why not start your own group?

Other important things you can do is check your tank isn't leaking as well as keeping it well maintained so that the material doesn't deteriorate and leak. You can check whether your oil boiler is efficient and look to upgrading it if it is not.