The EUA compared an average home with a heat pump, running at the efficiency level experienced under government trials and paying electricity at the Energy Price Guarantee, will spend £1,202 on heating, whereas the same property with an oil boiler and the latest market rate for heating oil will pay £707, a difference of £495 a year.

The EUA says these figures call into question the government’s plan to ban households from fitting new oil boilers after 2026, with heat pumps their preferred way of heating homes. The average cost of installing a heat pump, according to government figures, is £13,000.

Mike Foster, CEO of the EUA, said: “Households currently using oil to heat their homes will be shocked to find out that being forced to fit a heat pump will cost them £13,000 upfront and then an extra £500 a year for the privilege. It’s an appalling situation that faces those living in rural areas from 2026.

“Coming in the middle of a cost of living crisis, cheaper heating oil is welcome relief. But it just reinforces how much more expensive a heat pump would be. I’m not sure the government have thought this through properly. The penalty for being forced off oil simply cannot be afforded.

“Decision day is looming. The government have said from 2026, if your oil boiler breaks down, it cannot be replaced by a new oil boiler. We know many Conservative politicians share our concerns but their Ministers just aren’t listening. They may need voters in the upcoming local elections to give their judgement on the policy. It might be way they avoid the huge cash penalty coming their way soon.”