Bulk LPG - Cheapest suppliers / supply route?

Badger04

I am somewhat perplexed by latest comments on the thread. I have been buying lpg for 12 years. Since the introduction of the new government rules, you and the supplier enter into a contract. You both agree a price, sometimes fixed for 2 years and sometimes with a price increase in the second year. I have never been told I have to pay more than this. What are you agreeing at the beginning of your contracts? If your 2 years is up, you can get quotes from your existing supplier and others. Make clear to your current supplier you intend to switch if they do not offer a competitive price. If no joy, sign up with a competitor and they will take care of all the paperwork. I hope this helps.

mcmullank

Badger04 said:

I am somewhat perplexed by latest comments on the thread. I have been buying lpg for 12 years. Since the introduction of the new government rules, you and the supplier enter into a contract. You both agree a price, sometimes fixed for 2 years and sometimes with a price increase in the second year. I have never been told I have to pay more than this. What are you agreeing at the beginning of your contracts? If your 2 years is up, you can get quotes from your existing supplier and others. Make clear to your current supplier you intend to switch if they do not offer a competitive price. If no joy, sign up with a competitor and they will take care of all the paperwork. I hope this helps.

You may never have been asked to pay more but many have.  Every contract (Including fixed price) contracts can be broken by your supplier and your only remedy is to move to an alternative supplier.  I know that a few years back when LPG spiked, many of the nationals were knowingly breaching their contracts by increasing prices by a higher threshold than allowed in the contracts.  When this was pointed out to them by an agent they acknowledged that this was intentional.

I have personally been in this position where an LPG supplier nearly doubled the price of LPG which contractually required proof of the underlying market price increasing (Platts NW Europe).  No proof has ever been provided.

JerryW

Badger04 said:

I am somewhat perplexed by latest comments on the thread. I have been buying lpg for 12 years. Since the introduction of the new government rules, you and the supplier enter into a contract. You both agree a price, sometimes fixed for 2 years and sometimes with a price increase in the second year. ...

Unfortunately the standard contracts of all the major suppliers, including Calor, Flogas and Avanti, allow for unlimited price rises in year 2. The amount attributed to rises in operating costs is capped but the amount attributable to the wholesale cost of the gas is not. If you have never had occasion to discover this yourself you are lucky. See above as regards what Avanti tried to do to me only last year. Page 333: https://forums.moneysavingexpert.com/discussion/1003291/bulk-lpg-cheapest-suppliers-supply-route/p333

Andrew1066

Badger04 said:

I am somewhat perplexed by latest comments on the thread. I have been buying lpg for 12 years. Since the introduction of the new government rules, you and the supplier enter into a contract. You both agree a price, sometimes fixed for 2 years and sometimes with a price increase in the second year. I have never been told I have to pay more than this. What are you agreeing at the beginning of your contracts? If your 2 years is up, you can get quotes from your existing supplier and others. Make clear to your current supplier you intend to switch if they do not offer a competitive price. If no joy, sign up with a competitor and they will take care of all the paperwork. I hope this helps.

Happy to speak to that. I am in the last three months of my two year contract. 

The contract I agreed with Flogas stated they can increase the price up to 5PPL in the second year IF the whole sale gas price as defined by the Platt index has increased. 

I work in other natural resource sectors and this is known as flow through pricing, ie. raw material price increases are passed onto the customer and is quite common, if the customer agrees to it. 

Firstly, wholesale gas prices have consistently decreased since I signed the contract. Whilst the significant decreases have been in 2020, even if you purchase your raw materials on a 12 month lead time, their purchase price based on the Platt index is lower. If purchaseD on spot prices, I.e. today’s price they would be significantly lower. 

In summary they-
1. Tried to increase price to the maximum cap despite prices decreasing. 

2. In the contract they  state price increase will be EVIDENCED  based on the Platt index yet refuse to share the evidence stating “copyright protection”. 

3. The tried to threaten me with a 12PPL increase, which based on the contract is an outright lie. 

They asked for the issue number of the contract I signed and I have since found out their later contracts are so nebulous they can increases prices to the cap siting multiple justifications that are not based on wholesale gas prices alone. 

I hope this helps. 

Andrew1066

PS you can of course review their operating costs by examine their published annual reports and accounts. 

CanAmSteve

I must say that after having owned a home with LPG heating the last ten years (recently sold) I would never go that way again. We were familiar with mains gas systems, of course, and I suppose I harboured some crazy idea that our village would be connected one day. But the shenanigans of the suppliers (Calor in my case) and the restrictions on tank placement made life difficult - even in a detached home with a large plot. The setbacks from the road, lot lines, fences, trees, etc. seem excessive - given that an oil tank can be placed uphill from a neighbour right on the lot line.. While LPG is potentially explosive, the risk to soil/water pollution is minimal. Calor has a hard time getting and keeping drivers, so in the best of times was not that able to supply gas - then come various crises that just make things worse. Despite my "monitor" on the tank, they allowed it run dry one winter. Fortunately I had alternative forms of heat.

I suspect that it may be like the estate agent situation in England (gazumping/gazundering encouraged) where favours for those in the industry to politicians prevents any meaningful reform taking place. Much like BT's stranglehold on the internet and various single-option rail routes, lack of competition allows for consumer gouging and "maximising shareholder value". IMO, the gov't should create a "rural LPG supply" non-profit that supplies and maintains the tanks, pipes and connections. Users would pay their standing charges and the costs of maintenance to the non-rproft and then any supplier meeting standards would be allowed to fill any tank. That would be real competition, and a bonus for all users. I note in the US and Canada there is one 25lb standard LPG cylinder for BBQs, etc. and any supplier can fill any tank. The tanks are date coded and inspected before refill.

On a side note, I disposed of my fancy BP-specific BBQ LPG tanks when I moved as well, but could not recover the deposit because I had not retained the original receipt... for ten years. What a racket!

Bethmiss

Hello All,
Been out of contract with JGas since November 2018, and had no reason to look for better price. Contract was in my mother's name, and she died in February. They've sent out new contract with price of 36.7ppl (same as last couple of deliveries),  and standing charge of 16.44p per day. The previous standing charge was 10.96p per day. I noticed when new contract came in that the Standing Charge on last two deliveries had been increased to 16.44p. I don't think they should have done that without prior notification, and will certainly mention it when next in contact. I'm in rural Aberdeenshire, and have no idea what price LPG is just now, but I'd have thought it should be less than 36.7p/litre. Can anybody advise please? Haven't started getting quotes yet. Tank at 40%. Thanks for any help. 

LittleVermin

Hi Bethmiss, 

Sorry you lost your mum.
Quick instant response now.... Unfair Trading Regulations 2008 should protect you from that malpractice (raising daily charge without notice - assuming they did not tell your mum)...and I think you could claim the extra daily charge back. Quote the regs when you write to JGas  and ask for a refund. Give them time to reply ...and if the reply is unsatisfactory you can either go to Trading Standards (but may be chocolate teapot?) or direct to ADR (Alternative Dispute Resolution) [J Gas is a member of UKLPG, I believe]. Link for UTR 2008. Please keep the forum posted! (and refuse to be silenced by a NDA!).     

Bethmiss

Hi Little Vermin,
Thanks for sympathy about Mum. At least she died before Covid. Thanks for info on daily charge. They definitely didn't tell Mum about Increase, and it might have been a genuine mistake so I'll query it on phone first.  Low Standing Charge  was one of the reasons we moved to JGas from Flogas - Flogas was the other!  JGas kept price at 28ppl right through two year contract, and beyond, so quite good to us. I'd prefer to stay with them, if I can get price down a bit.  Whats a NDA?! Thanks.

JerryW

Bethmiss said:

...  Whats a NDA?! Thanks.

Hi Bethmiss

.. Littlevermin is quite right (as usual!) and if JGas are reasonable people they should refund the overpayment. An NDA is a non-disclosure agreement, which some less scrupulous companies use to shut people up that complain, so their shortcomings will not be publicised..

Good luck & keep us posted. If it were me I would tell JGas that if they will continue the contract for another two years at the old price you will stay with them .. their costs have gone down not up so they will find an 8p increase very hard to justify. Probably they are just hoping you will sign and not bother to query it. I find polite but persistent refusal to be fobbed off usually pays dividends