Bulk LPG - Cheapest suppliers / supply route?

ajyoung99

Hi there i am new to this and i currently am using LPG cylinders to run my central heating and Range cooker and as you can imagine it is costing me a fortune, so i am considering changing to bulk supply, (although reading some of the threads i am terrified). Anyway i live just north of oxford and i am looking for a good local supplier and would be interested in any advice on questions i should ask before i sign any contract, i.e installation cost, price per litre and any fixed period ect. Any help would be appreciated, sorry if this has already been covered.. Thankyou in advance....:huh: Tony

LittleVermin

ajyoung99 wrote: »

Hi there i am new to this and i currently am using LPG cylinders to run my central heating and Range cooker and as you can imagine it is costing me a fortune, so i am considering changing to bulk supply, (although reading some of the threads i am terrified). Anyway i live just north of oxford and i am looking for a good local supplier and would be interested in any advice on questions i should ask before i sign any contract, i.e installation cost, price per litre and any fixed period ect. Any help would be appreciated, sorry if this has already been covered.. Thankyou in advance....:huh: Tony

Hi Tony - and welcome to the forum.

The good news is that using bulk LPG is cheaper than cylinders - see Notts Energy price comparison.

The bad news is - well, you've read a lot of it already, it seems. But the figures for both bulk and cylinder LPG indicate why lots of us have diversified away from LPG - and, of course, put in more insulation. Some people have left LPG all together - and going for bulk LPG may make your property harder to sell (there are about 150,000 properties on LPG in the UK, I believe, compared to one or two million on heating oil).

I suggest you work through the advice in HateLPG's last post - and the linked post. And when you've a list of potential suppliers for your post code post them on the forum and see if anyone can add others (not all suppliers are members of UKLPG).

The supplier will provide a tank for free if you sign a contract (for 2 years) - after which you can switch. You'll need to provide the concrete base for the tank, and the plastic pipe from the tank to your house. The Calor website has useful plans about siting. These are NOT HSE requirements but meet the current UKLPG Code of Practice...but HSE is taking more interest in domestic LPG supply.

Alternatively you can own your tank and get LPG from the supplier which offers the best price. But you'll be responsible for testing every 10 years (the tanker driver does the check when he delivers - and this has to be at least once a year). The industry is buying tanks from abroad, e.g. Turkey I hear, and doing the job yourself will set you back about £1500 according to DAVID.T (who works for a supplier - and makes very useful posts).

If you go straight to getting quotes from the suppliers UKLPG lists do make sure you ask all the questions HateLPG suggests!

Good luck!

..

HateLPG

LittleVermin wrote: »

going for bulk LPG may make your property harder to sell (there are about 150,000 properties on LPG in the UK, I believe, compared to one or two million on heating oil).

Before LittleVermin scares you off completely (;)), there are a couple of very important up-sides to LPG when compared with Heating Oil:

1. It's far cleaner to deal with, and
2. It is far more difficult to steal!

There is an interesting post here on rural Oil theft, and take note, the true cost of heating oil theft can easily exceed the value of the fuel stolen by a factor of ten times or more if the thieves destroy your tank and pollute the surrondings in the process of helping themselves to your fuel supply!

I'm sure as soon as I post this, that someone will pop up and prove me wrong, but I have never heard of theft from domestic LPG bulk tanks (as opposed to the readily pilferable 47kg cyliders)

frozen_wastes

I just spoke to Gaulds Gas, Johnston Oils and Gleaner Oils

Gaulds Gas:
52.9ppl
£80 / year standing charge

Johnston Oils
Awaiting response, but they were insisting on supplying to their own tank only. I don't fancy the hassle of that.

Gleaner Oils
52.75ppl
£45 / year standing charge

Extra Fuels don't supply Aberdeenshire

I didn't ask any further. It looks like Calors price is around the ballpark figure.

LittleVermin

I emailed OFT when the Off-grid energy report came out in October, asking for more info, and intending to send them, before the deadline, plots of prices charged by suppliers against wholesale prices. Unfortunately they replied on the first working day after the deadline (i.e. 21.11.2011) BUT the reply included this, which may be useful:

While our market study is now concluded, the OFT continues to monitor the effectiveness of, and compliance with, the Orders which the Competition Commission made in 2008 and 2009 to remedy competition concerns in the domestic bulk LPG market. Any concerns you may have about compliance with these Orders may be drawn to the attention of our Markets Policy and Remedies team by e-mailing [URL="blocked::mailto:sharon.dias@oft.gsi.gov.uk"]sharon.dias@oft.gsi.gov.uk[/URL]. The OFT is also, as noted in our study report, engaging with suppliers to seek, where necessary, improvement in the clarity of contract terms, particularly concerning cancellation and switching rights. [FONT=&quot][/FONT]

LittleVermin

frozen_wastes wrote: »

<snip>

Johnston Oils
Awaiting response, but they were insisting on supplying to their own tank only. I don't fancy the hassle of that.

<snip>

The price the incoming supplier pays the outgoing is worked out using formula * produced by the Competition Commission in 2008. These has been revised upwards twice**, I'm told, so that it is often better for the incoming supplier to install a new tank - as tanks are being imported from e.g. Turkey whereas before they were sourced in the UK, Germany, etc with higher wage economies.

*see Schedules 1 and 2 at the end.
** presumably for RPI and Steel Price Index
..

DAVID.T_3

ajyoung99 wrote: »

Hi there i am new to this and i currently am using LPG cylinders to run my central heating and Range cooker and as you can imagine it is costing me a fortune, so i am considering changing to bulk supply, (although reading some of the threads i am terrified). Anyway i live just north of oxford and i am looking for a good local supplier and would be interested in any advice on questions i should ask before i sign any contract, i.e installation cost, price per litre and any fixed period ect. Any help would be appreciated, sorry if this has already been covered.. Thankyou in advance....:huh: Tony

Hi
How much are your cylinders costing you now, as the gap between tank and cylinder prices has reduced in recent years and it may not be worth going to bulk once you add tank rental

HateLPG

DAVID.T wrote: »

the gap between tank and cylinder prices has reduced in recent years

That's a very interesting observation. Can you shed any light on the reasons for this please David?

It seems counter-intuitive to me - I would have thought one of the main reasons for higher gross margins over wholesale in recent times (and certainly one that has recently been quoted by more than one supplier in defence of recent price rises) would have been increased cost of delivery due to increases in the price of diesel fuel. But logically, I would expect that to have a greater impact on Cylinder deliveries which tend to be made in smaller drops than bulk, so what other factors are in play here?

DAVID.T_3

HateLPG wrote: »

That's a very interesting observation. Can you shed any light on the reasons for this please David?

It seems counter-intuitive to me - I would have thought one of the main reasons for higher gross margins over wholesale in recent times (and certainly one that has recently been quoted by more than one supplier in defence of recent price rises) would have been increased cost of delivery due to increases in the price of diesel fuel. But logically, I would expect that to have a greater impact on Cylinder deliveries which tend to be made in smaller drops than bulk, so what other factors are in play here?

bulk 2000lts per year @ 45p ltr+ vat (although people are paying a lot more) = £900.00 + £50 tank rental =£950.00+vat

21.5 x 47kg cylinders @ 45.00+vat £ 967.50+ vat (locally they are selling for £42.00 +Vat)

I think the initial investment is the main thing, to install a new tank with metal prices now would be near £2000 for the gas company, and as they can lose the tank after 2 years, may take a hit on their investment.
Investment in cylinders 2 x 47kg £130.00. Down side deliveries are more often but the vehicle costs £ 25,000 not £110,000 for a tanker.

plus side/ for customer is no contract (although I have seen contracts from a certain company (sound like " toe gas") trying to tie people in.

down side/ bit of a pain as a lot of companies now expect you to connect and disconnect the cylinders

HateLPG

DAVID.T wrote: »

I think the initial investment is the main thing, to install a new tank with metal prices now would be near £2000 for the gas company, and as they can lose the tank after 2 years, may take a hit on their investment.

If that is truly the case (and I've not reason to doubt David's statement), then this is further evidence that the Competition Commission Orders of 2009 are not working. Indeed, it suggests that they could actually be working counter to consumer interest.

There is a fixed formula for tank transfers that should mitigate any investment "hit" on tank transfers. If it doesn't mitigate this risk, then the formula is quite simply wrong.

But on the other hand, the recent OFT study into Off-Mains supplies concluded that by-and-large, the CC Orders were working just fine, so as far as they are concerned, the formula can't be wrong.

Or the formula is just fine, but there are more factors at work here.

Whichever way you cut it, something here doesn't really add up.

But then why am I surprised? Having read the OFT report, I would be inclined to disregard the majority of their conclusions in respect of the bulk LPG market. To paraphrase the classic Americanism: "The OFT understanding of the LPG market doesn't amount to a hill of beans"