Plans to introduce a pay-as-you-go oil metering system to help struggling families have been scrapped, the Social Development Minister confirmed.
Nelson McCausland said production and administrative costs coupled with supplier issues meant the scheme, aimed at tackling fuel poverty, would not be rolled out by his department.
Speaking during Question Time at the Assembly the DUP Minister said: "It is not feasible to introduce the scheme at this time but I am always open to new ideas."
In Northern Ireland almost 70% of homes rely on oil - compared with around 4% in England.
Although natural gas is between 30% and 35% cheaper, the gas network does not extend to more rural areas.
It was hoped the new pay-as-you-go system could help struggling families whose location restricts their choice of fuel cope with the spiralling costs of oil.
Technology, including a home display unit so families could see what they were spending, was installed on 20 oil tanks in homes in the Dungannon, Camlough and Newcastle areas and was tested over three months last year, but Mr McCausland described the results from the pilot as disappointing.
Fuel poverty occurs when the costs to heat a home to an adequate standard exceed the income. In Northern Ireland, thousands of householders face the tough choice every winter of whether to turn on their heating or feed their family.
Mr McCausland said his department had already funded a range of energy efficient schemes and was committed to eradicating fuel poverty but added: "In households that are heavily dependant on benefits this is a real issue. The decisions by the Conservatives and Liberal Democrats will have an impact."
Meanwhile Cathal Boylan, Sinn Fein MLA for Newry and Armagh, said the decision not to press ahead with the metering initiative could lead to increased levels of fuel poverty.