Bulk LPG - Cheapest suppliers / supply route?

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  • LittleVermin
    LittleVermin Posts: 737 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    edited 24 January 2011 at 1:21AM
    suesmiles wrote: »
    .....
    Thank you, Little Vermin - it's helpful to know what the average current price is. Yes, Calor own my tank but when I spoke to Shell yesterday, they explained that they would purchase it from Calor - I need to find out, of course, whether any payment would be required from me. I'm not on any contract at the moment, so I may leave it until the Spring as you recommend. I would jump for joy if prices dropped - although looking back I see that they did around May 2009 so it is possible, albeit not likely! :(

    Ownership of your tank.
    Shell buys it off Calor. You do NOT pay anything (see clause 2.7 in http://www.competition-commission.org.uk/inquiries/current/gas/lpg_order_final.pdf )


    More info on tank ownership – and correction of a couple of brandeberryj’s posts:
    LPG suppliers do NOT have to offer to supply anyone (see bananabread’s post #581 as an example of this – and there are earlier posts where the tank or its location did NOT meet current regs), but if they do they must give a quote over the phone subject to site inspection. It is not true, despite brandeberryj’s block capitals, that “due to the competition authority at the end of the LPG contract if you change suppliers the previous supplier MUST SELL THE TANK TO THE NEW SUPPLIER at a preset price” http://forums.moneysavingexpert.com/showpost.php?p=39802602&postcount=15
    And see also his post: (http://forums.moneysavingexpert.com/showpost.php?p=39885058&postcount=13 ) just because you say something twice doesn’t make it true!

    The actual situation – if you read the Competition Commission Final Order (see link above) is that if you, the user, send in a ‘tank transfer form’ the outgoing supplier must offer to sell the tank to the incoming supplier (Schedule 1 gives a formula for the price) BUT the incoming supplier does NOT have to buy the tank off the outgoing supplier: they can supply their own (you don’t pay) and the outgoing supplier removes theirs (there is NO uplift charge to the user if it’s the end of the contract, either by virtue of 2 yrs being up OR if the supplier broke the terms of the contract and the user gave notice). If there is a change of tank the deal has to go through in 42 days, but with a transfer of tank it has to be within 28 days. It’s all in black and white in several documents – which I have posted or linked to before – such as the CC doc but here’s another http://www.consumerdirect.gov.uk/EnergySupplyandPost/energysupply/563247/LPG


    AND YOU DO NOT HAVE TO REQUEST A TANK TRANSFER – you can ask for a new tank from your incoming supplier (that’s CC Order Clause 2.5). If your existing tank was old and you think that maybe in the future you might buy the tank – and escape the 2 year exclusivity – then a new tank would make sense.


    20 year old tanks?
    HateLPG has recently posted (#610 and #624) that Calor and Shell engineers have told him they hoick out 20 year old tanks. A Flogas engineer told me (this year) they do the same. The tanks may be structurally sound (i.e. pass the ultrasound test) but the accessories may need changing – and, in my case, I was told the ‘Christmas Tree’ on top was obsolete. You should find data on your tank on the brass plate (for example mine was made in 1988, tested in ’91, then retested in ’01 and ‘10). If yours is an old tank you might NOT want to buy it off Calor!

    Price drops?
    Extra Fuel’s monthly LPG prices hit a high for 2009 in February and for 2010 in January, and fell to lows in both summers (May 2009, June 2010). Of course price patterns in the past are not guaranteed to repeat! I believe you can use Extra Fuel’s prices as a proxy for wholesale LPG prices (but maybe DAVID.T can advise?). Speakeasy’s post (#625) about getting a new contract in the Autumn makes sense, but maybe is a gamble too far.

    (Sorry about changes in text size)
  • HateLPG
    HateLPG Posts: 464 Forumite
    First Anniversary Combo Breaker
    ...BUT the incoming supplier does NOT have to buy the tank off the outgoing supplier: they can supply their own (you don’t pay) and the outgoing supplier removes theirs (there is NO uplift charge to the user if it’s the end of the contract, either by virtue of 2 yrs being up OR if the supplier broke the terms of the contract and the user gave notice).

    This is what happened to me when I changed Suppliers. The tank was ancient, so the incoming supplier, quite understandably, didn't wish to exercise their "Right to buy". One thing to be aware of in such a situation is that it then becomes the responsibility of the outgoing supplier to physically remove their tank from your property. The incoming supplier will move it to enable them to install your new tank, but you will them need somewhere safe and accessible to store the old one until such times as your outgoing supplier dains to collect it (which in my case, was the thick end of a month!).

    5.2 If the statements confirm that the customer is eligible to switch and that the existing supplier owns the tank, the existing supplier shall at the same time as he provides the statements also provide the new supplier with:

    <detail snipped for brevity - see original quoted post>

    so no mention of the LPG user's rights to have this info!


    I don't know, but I would presume that this would give the customer the right to a copy of this information if they were buying (or more importantly in light of the original post asking about availability of certifications) considering buying the tank (when contractually permitted). After all, there is no obligation to proceed with a purchase once you have "expressed an interest", so that might be one way to get the said information. As LV has obviously just re-read the CC order (or has a photographic memory ;)) maybe he can confirm?
  • Responding to The Hornet's post #628 about Countrywide increasing their LPG prices by 4p, I also got a letter on 22 Jan from Countrywide, but putting my price up by 7ppl (from 35ppl, but they don't mention my existing price in the letter, or the price it is going up to, just the 7p increase).

    Some weeks or months ago I thought I read a posting here that said that suppliers had to raise everyone's price by the same amount, with a comparison to the mortgage market, where everyone with a similar mortgage product has to have prices go up or down by the same amount. Sorry not to trawl back through the posts - I will do given time. But can anyone comment on this? Do all customers prices have to go up/down by the same amount, or can a supplier raise some people's price by more than others?

    Thanks for any advice.
  • HateLPG
    HateLPG Posts: 464 Forumite
    First Anniversary Combo Breaker
    edited 24 January 2011 at 10:10PM
    Den2Mark wrote: »
    Responding to The Hornet's post #628 about Countrywide increasing their LPG prices by 4p, I also got a letter on 22 Jan from Countrywide, but putting my price up by 7ppl (from 35ppl, but they don't mention my existing price in the letter, or the price it is going up to, just the 7p increase).

    Some weeks or months ago I thought I read a posting here that said that suppliers had to raise everyone's price by the same amount, with a comparison to the mortgage market, where everyone with a similar mortgage product has to have prices go up or down by the same amount. Sorry not to trawl back through the posts - I will do given time. But can anyone comment on this? Do all customers prices have to go up/down by the same amount, or can a supplier raise some people's price by more than others?

    Thanks for any advice.

    Any suggestion that LPG prices should be, or are, in any way linked to mortgage rates are totally specious. There is no conceivable link between the two. The OFT prefer a link to the Platts LP Gaswire index and/or RPI. Sadly, the Platts index is not available to mere mortals like us, unless we are willing/able to fork out over £1500 a year (and if that was an option, I guess we wouldn't be worrying about the odd penny or three increase here and there ;))

    Also, as far as I am aware, there is no requirement to raise prices "universally" (although many companies choose to do this). There are a number of factors that affect cost and what, if any price rise can be imposed: RPI, LPG commodity price, the customer's rate of usage, the distance from the distribution depot and, very importantly, any specific contractual terms in force at the time. Furthermore, "standard" contracts vary from time to time - all contracts changed when the OFT ruling came into force in 2009 (or at least they should have). On top of this, companies can change the terms of the contract for new customers at any time, for example Shell changed their contract sometime over the last year or so to change their maximum permitted rate of rise from 10ppl / 6 months to 3.5ppl / 6 months.

    We have all become used to Calor, Flogas et al imposing blanket price rises across their entire customer base and relying on the individual customer to call "foul" if they breach their contract by so doing, but the fact that Countrywide seem to be imposing different rises on different customers could, in fact be construed as a "good thing", at least in as much as one could infer that they are imposing the rises on a "case-by-case" basis.

    My suggestion would be to check the small print on your contract carefully. I would also suggest that you read back over my recent posts on "unfair" contracts (http://forums.moneysavingexpert.com/showpost.php?p=40237294&postcount=590 and http://forums.moneysavingexpert.com/showpost.php?p=40209456&postcount=582) to satisfy yourself that the contract you have is actually legally enforceable (remember, an unfair contract term can not be enforced)

    I notice that, for some reason, the link I posted to the OFT ruling on the unfair Flogas contract has disappeared ("curious"!), but the OFT statement in respect of pricing is as posted in my post #582, referenced above.
  • SD-253
    SD-253 Posts: 314 Forumite
    edited 24 January 2011 at 12:14PM
    HateLPG wrote: »
    brandeberryj
    HateLPG wrote: »
    Do you really think that your standing charge will remain at the same level for the entire duration of your contract?
    Umm yes I do think the standing charge is going to remain the same for the entire duration of the contract that’s why it is called a contract. Wouldn't you agree? And I have said the standard cost of the standing charge is £60 in fact he asked me what my previous charge was and said he would charge the same. Are you sure people are not just agreeing to the first thing they (the salesman) offers?
    HateLPG wrote: »
    brandeberryj
    HateLPG wrote: »
    And anyway, tank installation is a necessary cost of sale - they are not (or shouldn't be) in the business of making the money back from the tank.
    What I was saying is to get back the cost they charge the cost plus at least inflation not to make a loss?
    HateLPG wrote: »
    brandeberryj
    HateLPG wrote: »
    They make their money on the LPG that sell you to they put in the tank. Provided they can cover the cost of the tank, then they are well up on the deal! (It's called opportunity cost, BTW)
    No sorry if you put in an oil tank, that may be true, as its your tank after all but a LPG tank is there’s and I would want more than my money back depending of course on how much the customer uses. For instance surely others would be subsidizing me? As they are!
    HateLPG wrote: »
    No doubt, I will get a typically abusive response to this!
    Well?? Possibly I am a little abrasive and should not rush into a reply?? But I do think people on this site are being overly harsh at times to LPG companies on the wrong things. LPG prices are the problem nothing else.
  • SD-253
    SD-253 Posts: 314 Forumite
    Den2Mark wrote: »
    Responding to The Hornet's post #628 about Countrywide increasing their LPG prices by 4p, I also got a letter on 22 Jan from Countrywide, but putting my price up by 7ppl (from 35ppl, but they don't mention my existing price in the letter, or the price it is going up to, just the 7p increase).

    Some weeks or months ago I thought I read a posting here that said that suppliers had to raise everyone's price by the same amount, with a comparison to the mortgage market, where everyone with a similar mortgage product has to have prices go up or down by the same amount. Sorry not to trawl back through the posts - I will do given time. But can anyone comment on this? Do all customers prices have to go up/down by the same amount, or can a supplier raise some people's price by more than others?

    Thanks for any advice.
    This is illegal (raising price by differing amounts) as that in itself would be an unfair contract. Raiseing relatively to the morgage market is not got anything to do with LPG market prices? It could mean rididculas rise or vice versa.
  • Den2Mark
    Den2Mark Posts: 15 Forumite
    First Anniversary Combo Breaker
    Apologies for my unclear wording in my post #637.

    I did not mean to imply that LPG was linked in any way to mortgage rates. I was just thinking of the statutory controls which I believe exist over the mortgage market that require everyone on a similar contract/product to have their increases go up or down by the same amount, so I was asking if similar controls existed for the LPG market?

    Thanks brandeberryj for confirming that they do, and thanks HateLPG for the clarifications on unfair contracts. I can see though that there may be legal conflicts if some people are on guaranteed prices at the time that a 'universal' increase is imposed.

    If anyone can point me to regulatory chapter and verse to quote on this issue when I get into negotiations I would be grateful.
  • HateLPG
    HateLPG Posts: 464 Forumite
    First Anniversary Combo Breaker
    edited 11 April 2011 at 10:04PM
    Umm yes I do think the standing charge is going to remain the same for the entire duration of the contract that’s why it is called a contract. Wouldn't you agree? And I have said the standard cost of the standing charge is £60 in fact he asked me what my previous charge was and said he would charge the same. Are you sure people are not just agreeing to the first thing they (the salesman) offers?

    Actually, no, I wouldn't agree.

    From the current Flogas Contract Terms (which I have readily to hand):
    .... Please further note that this standing charge is subject to increases in our operational costs and other such increases which may be passed on to you.
    It is arguable that this in practice contract term as it stands is unfair, for the reason that it potentially allows unfettered increase of standing charges, but in principle, it is a fair and legitimate clause. As I posted before, read back through this forum and you will see that tank standing charges are unquestionably increasing.
  • HateLPG
    HateLPG Posts: 464 Forumite
    First Anniversary Combo Breaker
    edited 11 April 2011 at 10:03PM
    But I do think people on this site are being overly harsh at times to LPG companies on the wrong things. LPG prices are the problem nothing else.

    So would you mind enlightening us on which of these cuddly LPG companies you actually work for? ;)
  • HateLPG
    HateLPG Posts: 464 Forumite
    First Anniversary Combo Breaker
    edited 11 April 2011 at 10:03PM
    This is illegal (raising price by differing amounts) as that in itself would be an unfair contract.

    No. It. Isn't.

    Each and every user is quite entitled to try to negotiate their own specific contract, and every supplier is quite entitled to offer whatever enticements, introductory offers or other deals it sees fit to capture the business.

    What is illegal is to breach that contract, or to couch it in such terms as to permit an "unfettered" price rise (the OFTs term, not mine!)
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