Heating oil consumer John Knight runs a voluntary scheme for the purchase of heating oil, and orders on average once a month during winter. He found that the price of heating oil had risen so sharply during December, compared to the crude oil market, that parliamentary involvement was required. He wrote to his local MP, Sir Peter Tapsell, who in turn requested a response from Charles Hendry. Charles Hendry's response at the end of 2010 was somewhat muted, stating that "the Government is aware that the increases in heating oil prices experience recently, have been costly for consumers and are a continuing cause for concern." He described how hard things are in the oil supply world, by quoting from the Federation of Petroleum Suppliers (FPS) which appears to be the single source of information for the Government. He believes that "we have an open market for heating oil in the UK and we believe this provides the best long term guarantee of competitive prices for the consumer".
Instead of the Government taking any action, Mr Hendry suggested that Mr Knight approach the OFT (Office of Fair Trading) as it has the power to "investigate allegations of anti-competitive agreements and abuse of a dominant market position". He also pointed out that the OFT has no power to act on rising prices alone, but needs evidence of anti-competitive behaviour.
Now we hear that Mr Hendry has decided after all that the December 2010 price hikes are enough for him to intervene, and to push for a proper assessment of the off-grid energy market. He is expecting conclusions from the OFT in advance of the winter of 2011. This will be cold comfort to everybody who found themselves hit by exorbitant heating oil bills or just unable to afford it, but hopefully they won't be back in the same predicament by the end of the year.
To add to the OFT's body of evidence, submit your own experience. Here is the address:
The Office of Fair Trading Fleetbank House 2-6 Salisbury Square London EC4Y 8JX
The latest figures available show that around 828,000 households in England; 155,000 in Scotland; 143,000 in Wales and 527,000 in Northern Ireland use domestic heating oil as their main heating fuel. These figures are estimated by each devolved Administration from their latest housing and house condition surveys.
Charles Hendry presents the following table of UK expenditure on heating oils by the domestic and non-domestic sector: (figures of £million)
Source:Digest of UK Energy Statistics (DUKES) 2010
Neither the domestic nor the non-domestic data above are able to be split by country. A large proportion of the non-domestic fuel spend shown above will be used for non-heating purposes.
Data from the ONS’s Family Spending report suggest that on average for the period 2007-09, households in England spent £0.90/week, in Scotland £1.40/week, in Wales £2.50/week and in Northern Ireland £13.80/week on home fuels excluding gas and electricity.
2) Updated 20 January 2011, a heating oil briefing paper by Louise Smith and Paul Bolton contains 11 pages of summary for the recent situation affecting thousands of people, especially those in fuel poverty, and also comparing domestic oil prices against crude oil prices.