Support will be targeted to help low-income households in rural communities, although local councils will decide who qualifies and how the money is distributed.
Unlike consumers who use gas and electricity for heating and hot water, prices for households using oil are not capped by regulator Ofgem and some have say costs have doubled after the impact of rising crude prices since the outbreak of the US-Israeli war with Iran.
About 1.5million UK households use heating oil - 760,000 in England, 500,000 in Northern Ireland, 140,000 in Scotland and 110,000 in Wales.
In England, the extra cash will be distributed by local authorities via the Crisis and Resilience Fund, which comes into effect on 1 April, and replaces the temporary Household Support Fund.
The support will go to those at immediate risk of losing hot water, and funding will be given to local authorities in proportion to the number of heating oil users. It will then be up to councils to work out how to distribute the money.
If help is needed before the Crisis and Resilience Fund starts in April, people can apply to local councils for support, but any cash would need to be from existing budgets.
The Local Government Association said that heating oil was already covered in guidance for councils on both the Household Support Fund and the Crisis and Resilience Fund, and that it had not been made aware of any changes to how they are applied.
In Scotland, Wales and Northern Ireland the money will be allocated directly to the devolved governments, "with the expectation that it will be used to support vulnerable households", the government said.
Northern Ireland will receive £17m, England £27m, Scotland £4.6m and Wales £3.8m.