UK to set out £50m household support package as energy costs rise
The UK government has announced a £50 million support package aimed at helping low-income households cope with rising energy costs.
Initially introduced to assist households affected by soaring heating oil prices, the scheme has now been expanded to include homes that rely on liquefied petroleum gas (LPG), ensuring that support reaches more off-grid households.
The move comes amid continuing volatility in global energy markets following conflict in the Middle East.
Why the government is introducing new support
Energy prices have surged in recent weeks due to disruption in global supply routes.
The conflict involving Iran has placed pressure on key energy transport corridors, particularly the Strait of Hormuz, one of the world’s most important oil shipping channels.
The disruption has pushed up the cost of fuels including heating oil, with jet-kerosene prices trading at roughly double the price of crude oil in some markets.
As a result, many UK households that rely on oil-based heating systems have seen rapid increases in fuel costs.
LPG households now included
The £50 million subsidy was initially designed to help households using heating oil, but the government has confirmed it will now also apply to LPG users.
Liquefied petroleum gas is commonly used in rural homes not connected to the mains gas grid, where it is used for:
• Heating
• Cooking
• Hot water
According to Liquid Gas UK, around 200,000 UK households rely on LPG for heating.
While wholesale LPG prices have not surged as dramatically as heating oil, they have still increased significantly. For example, the Northwest European large-cargo propane benchmark recently reached $817.75 per tonne, a four-year high.
Why LPG prices are rising
Even though Europe does not import significant volumes of LPG from the Middle East, global market shifts are still having an impact.
The effective closure of the Strait of Hormuz has forced Asian buyers to compete more aggressively for supplies from the United States — a key source of LPG for Europe.
This increased competition has driven prices upward in international markets, eventually filtering through to consumers.
Why off-grid households are more vulnerable
Unlike electricity and mains gas, fuels such as heating oil and LPG are not covered by the UK energy price cap set by Ofgem.
This means prices are determined entirely by the market, leaving consumers exposed to sudden price increases when global supply tightens.
Off-grid households often face additional challenges:
• Limited fuel supplier options
• The need to buy fuel in bulk
• Greater price volatility
• Older or less energy-efficient housing
For these households, sudden market shocks can quickly translate into significantly higher heating costs.
Who will benefit from the scheme?
The government has said the support package is aimed at low-income households that rely on alternative heating fuels.
Legal provisions are being adjusted so that support can be applied to any fuel used for domestic heating, cooking or lighting, ensuring households using LPG are not excluded.
Further details on eligibility and how the payments will be distributed are expected in the coming weeks.
Energy market uncertainty continues
Energy prices across Europe remain sensitive to geopolitical developments and supply disruptions.
While wholesale markets may stabilise over time, the recent volatility highlights how global events can quickly impact household energy costs — particularly for homes relying on fuels outside the regulated electricity and gas market.
Taking control of your energy costs
Even with government support, reducing energy consumption remains one of the most effective ways households can manage rising costs.
SmartGen analyses your live smart meter data to show exactly where you're overspending and gives you a clear, personalised plan to reduce your bills. By understanding your energy usage patterns, you can make smarter decisions that help offset rising prices.
If you’d like to take control of your household energy use, Download SmartGen on the App Store.
Because when energy markets become unpredictable, better insight into your usage becomes more valuable than ever.
