Bulk LPG - Cheapest suppliers / supply route?

HateLPG

For those of you who might have missed it, here is link directly to the "listen again" webcast of today's LPG item on BBC Radio 4's "You and Yours":

http://www.bbc.co.uk/programmes/b00wsqw2#p00cxpgv

I haven't yet had time to fully listen to and digest the item, however, given that the presenters only have a few hours to investigate and learn an issue, in this case a complex one (remember, most of us have been discussing these issues for months or even years - and worrying about them for longer), my intial thoughts are that they made a very good effore to try to cover the key points in a very limited time. Unfortunately, the interviewee (Robert Shuttleworth, Chief Executive of the UKLPGA) inevitably knew far more about the issues than the interviewer and was therefore able to avoid directly answering the more difficult questions, even when pushed by the reporter. I suspect some of this would only be apparent to those familiar with the ins and outs of this business.

If time permits, I will listen again, and post a more comprehensive critique of the item (unless someone beats me to it!), and (more importantly) will also forward my comments and observations to the You and Yours team. If there is sufficient concern about the points covered (and other issues) they may feel that it would be worthwhile to invertigate further, as they did in the case of the iterm they recently ran about domestic Heating Oil.

longforgotten

Wondering if anyone has had any lpg from Countrywide lately ?

Ordered mine 10 December and lady said they were taking 3 weeks to deliver !

Have tried numerous times by phone, either engaged or no answer. Have e-mailed and no reply to that either. Looked for some sort of news on their website, if its there I've missed it.

Last day in work and I may well be borrowing the electric heaters for the holidays !

Bin wagon has been up our lane today so I'm assuming all will be well for a delivery but is their anyone there in their Worcester depot ?

Any sightings of a Countrywide tanker in action .............

jimmyboy1980

LPGemployee wrote: »

Did you know that each vehicle that delivers gas costs a minimum of £500,000 to purchase and that there lifespan is usually no more than 6 years!!

I haven't checked the forum for a couple of months, but the amount of bull that these guys spout out just amazes me. I have been in transport all my life and own my own transport company in the south west. If you were to divide that figure by somewhere in the region of 5 to 7, I would imagine your figure would be more realistic. Do you chaps swear an oath to attempt to blinker everyone? Oh how I chuckled! Great work on the forum, guys. Keep up the pressure!

jimmyboy1980

LittleVermin wrote: »

wind00 - you might like to contact Auntie:

one interesting quote from there website ;

A relative works in the Fuel Distribution Industry. They have told me that their phones have not stopped ringing for the last four to five weeks and that demand has increased by six times than what is normal at this time of year. They are currently quoting 4-6 week delivery lead time as, unfortunately, their resources have not increased at the same level as demand. Their staff have, and are, working flat out, to exceeed their customers expectations and are very much looking forward to their break at Xmas!.The issue has been caused by the early cold snap; the fact that people have left it until the last possible moment to replenish their tanks; the fact that it is Xmas and everyone wants it to be ‘perfect’ for their families and visitors and that the media coverage has caused a hysterical, selfish, panic situation. Customers are phoning in and saying they have run out and when the delivery personnel get there they find their tank is 75% full – this prevents deliveries to the extremly vulnerable – who are less likely to complain & harass! My relatives company has been extremely realistic regards their ability to deliver and also provide a competitive price per litre – currently 0.62p per litre. The main concern now is that the ‘ big boys’ who deliver the fuel to the distributors are not delivering according to the order & delivery schedule – stating that the motorway service stations are the priority….this is obviously quite concerning considering that the old & vulnerable who need domestic heating fuel may not receive their fuel due to the ‘ big boys’ choosing not to deliver to domestic suppliers…………

The_Hornet

longforgotten wrote: »

Wondering if anyone has had any lpg from Countrywide lately ?

Ordered mine 10 December and lady said they were taking 3 weeks to deliver !

Have tried numerous times by phone, either engaged or no answer. Have e-mailed and no reply to that either. Looked for some sort of news on their website, if its there I've missed it.

Last day in work and I may well be borrowing the electric heaters for the holidays !

Bin wagon has been up our lane today so I'm assuming all will be well for a delivery but is their anyone there in their Worcester depot ?

Any sightings of a Countrywide tanker in action .............

Yup! Ordered before Xmas and said it wasn't urgent and they came after about 2 weeks, a few days before Xmas. It was during the height of the cold spell with about 6inches of snow on the ground. Excellent service as usual. Im in Herefordshire.

longforgotten

Thanks Hornet. Glad to hear they are out and about... still waiting though hoping they will arrive end of this week when 3 weeks up.

Bargainscot

Appreciate some help if possible.
Look after my 90 yr old father in law and ordered lpg from my supplier, Shell on 8 December when guage read 35%.
Since then there I have continually updated them on my dwindling supply and reminded them that we had an elderly man in residence.
Tank now empty and I'm really worried.
Called and emailed today to ask for an emergency delivery and was informed that they could only mark it as urgent as their policy prevented marking it as an emergency.
Can't find any Director contact details. Anyone any ideas???

LittleVermin

LPGemployee wrote: »

Ok...this could be Dangerous...I work for one of the LPG suppliers.
Ive sifted through some of these threads and i have to say some of the posts have made me laugth. (Im not laugthing at anyone!). But I have noticed that some of the advice given is absolute rubbish!

<snip>
businesses have to make a profit or there would be no point!

Did you know that each vehicle that delivers gas costs a minimum of £500,000 to purchase and that there lifespan is usually no more than 6 years!!

I am going to keep an eye out on this thread and if anyone has any questions to ask i will answer thm as honestly as I can

<snip>

Im simply here to be honest!!!!

DAVID.T has already commented on tanker costs - he says he's been in the industry 20 years and he buys them and they cost £150K "AT MOST" (post #312) (and he's also said they commonly come in 2 sizes). Also jimmyboy1980, who says he owns his own transport company, has said £500k is several times too high (post #504).

I just thought I'd add two snippets from the on-line LP Gas magazine - "The Voice of the Industry".

First, in June-July 2010, BP was reported to have bought 9 tankers from Lakeland Tankers. Total cost - including project management, driver training, etc, etc was £1.2 million - that's £133k per unit (with add-ons).

http://www.lpgasmagazine.co.uk/transport/BP-LPG-Searches-Europe-for-Lakeland-Tankers.htm

And in August-September 2009 Callowgas was reported to have bought a Volvo unit and was quoted "we reckon on a service life of 10 to 12 years".

http://www.lpgasmagazine.co.uk/transport/Callow-Gas-Expands-Lpg-Gas-Delivery-Fleet.htm

LPGemployee wrote "if anyone has any questions to ask i will answer thm as honestly as I can" so, please (even if you don't believe David.T and jimmyboy1980) how can the LPG supplier you work for pay so much for their tankers - and get such a short lifespan from them? You wrote "businesses have to make a profit or there would be no point!" so I'm sure there's a reasonable answer since your company is still trading, I presume.

GrandadRob

Just two small items. My neighbour has LPG from Countrywide, they use the automatic top up sender. It sent a signal on December 10th.....Yesterday they ran out of gas. Countrywide came this morning.....good service ?

We obviously all have boilers for our LPG. If you have or don't have a condensing boiler, please go to http://www.dailymail.co.uk/home/index.html

Scroll down to the item about Condensing boilers, a really interesting read...........

HateLPG

Well, I've had another listen through to the "You and Yours" item on LPG broadcast on Wednesday 22nd December. There were a number of contributions from LPG users and then a response from Mr. Robert Shuttleworth, Chief Executive, UKLPG.

A significant part of the item concerned the current supply issues. There are clearly a number of fundamental issues that must be addressed by the companies in respect of that as a matter of urgency. I am, however, prepared to accept that the industry, which has a supply-chain almost entirely dependent on road transport, has (to a certain extent) been caught out by the recent exceptional weather conditions (the amounts of snow this year have been the heaviest and most widespread in the UK since 1993 and the deepest November snow since 1965 [ref:http://www.metoffice.gov.uk/corporate/pressoffice/2010/pr20101130b.html]). I would be more deeply concerned if these issues recurr, since any reputable company should now be working flat out to develop contingency plans to ensure that as far as is at all possible, these sort of widespread supply problems never happen again.

There was then some more general discussion in respect of prices and market operation which I have transcribed and to which I have added my comments below. These comments are broadly those that I have sent to "You and Yours" ([EMAIL="youandyours&#64;bbc.co.uk"]mailto:youandyours@bbc.co.uk[/EMAIL]), so please take them in that context. If you feel strongly about this issue or about anything covered in the program, please take five minutes to contact them with your concerns too - the more feedback they get, the more likely they are to dig / investigate further!

The full item can (currently) be heard on the bbc website:

http://www.bbc.co.uk/programmes/b00wsqw2#p00cxpgv

Anyway, for those of you who haven't heard it, or who may be interested in my reaction to the piece, here goes with the partial transcript and my coments:

Q. [Winifred Robinson, BBC]: What about the prices then? The complaints are that they only ever go up and they've been rising steeply and unpredictably. Who and what determines the prices that are levied to customers?

A. [Robert Shuttleworth, UKLPG]: Well first of all, I think all oil related products have seen price rises for a number of years now. LPG itself is a separately internationally traded commodity and is traded in dollars so there have been two impacts on the price and I can say currently on the commodity price its actually trading at an all-time high and we have seen significant price rises over the last part of this year. In fact, I think the commodity price has risen much more than the price that your consumer you quoted on your clip just then has actually experienced so companies do try and absorb some of these price rises themselves.

Comment: This is, in my opinion, simply a "misrepresentation of the facts". If you accept that the "number of years" is slightly fewer than two, then yes, this is more or less correct. In fact, oil prices rose steadily from 2001, until they reached a peak of $147 per barrel in July 2008, before collapsing to $35 per barrel in the second week of January 2009 (a fall of more than 75% in six months). At the time of writing, Brent Crude is trading at $93.69 per barrel - still only 64% of the peak price.

At no time during this period, am I aware of ANY cost reductions being passed on to consumers, so to claim that now prices are rising again, the companies are "absorbing" some this latest rise is simply disingenuous. It would be more accurate to suggest that they are unable to maintain the huge margins they were able to enjoy when the price fell.

Ref: http://news.bbc.co.uk/1/hi/business/7845777.stm

Q. [Winifred Robinson]: So its because of what? The falling value of the pound?

A. [Robert Shuttleworth]: Yes. The dollar strength and the LPG itself is traded on internationally traded indeces in dollars and ultimately that's the price my member companies, the LPG companies, have to buy the product at to sell to their customers.

Comment: The exchange rate shifted from a relatively steady position in the region of $1.95 prior to August 2008, to an average position in the region of $1.58/£ by May 2009, bottoming out at $1.37/£ in January 2009. This fall, broadly correlates with the price drop on Crude discussed above. Taking into account the currency fluctuations this means that in "pound" terms, the price of crude dropped from £73.86 per barrel in July 2008 to £25.36 per barrel in January 2009, still a reduction of about 66%.

Ref: http://uk.finance.yahoo.com/echarts?s=GBPUSD=X#symbol=;range=5y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

Q. [Winifred Robinson]: The other complaint is this business of the two-year tie in, where you are effectively tied to a certain supplier for two years and there's no proper competition in the market.

A. [Robert Shuttleworth]: Well there is a lot of competition actually. There are about 35 LPG companies around the country. There are four National companies, as your listener said, but there are another thirty-odd local companies and each company, if you put your post code into our website you can find out which companies supply your area, and typically there might be from four in perhaps the most remotest parts of Scotland, to maybe nine, ten or eleven in some parts of the country.

Comment: Not all the "thirty-odd local companies" are in fact independent re-sellers. For example, Mole Valley Farmers is effectively a "buyers-cooperative", which requires a membership fee. The gas is actually supplied and delivered by Flogas, however anecdotal evidence suggests that Mole Valley Customers come "further down the pecking order" than Flogas' own customers.

Q. [Winifred Robinson]: Yes, but once you're tied in, you're tied in for two years.

A. [Robert Shuttleworth]: Yes. The contract itself actually offers some protection to customers. It came about as a result of the OFT having a look at the LPG industry and it did look at the option of customers buying spot prices. But actually, I think as you heard with Oil, if customers are buying on spot prices, they're struggling at the moment. The contract means that the prices are.. they are advised of their prices up front. They're protected with secure deliveries over the period of the contract and at the end of the two year period .. the two year *exclusivity* period, they are free to change suppliers.

Comment: The contract actually offers little or no protection to consumers. I got the distinct impression that Mr. Shuttleworth felt uncomfortable with this question and was very careful to avoid any mention of price issues
[listen for yourself, and see what you think!].

Although the contract offers "tenure of supply", and possibly some remedy should the supply fail, as can clearly be seen see at present, it does not, contrary to Mr Shuttleworth's assertion, offer any guarantee of continuity supply. Furthermore, because consumers are locked in to an exclusivity period for two years, they are subject to any price rises that their supplier should choose to impose. Some suppliers offer a contractual limit on the price rise, but that limit is not a legally binding requirement to supply at any given price, merely an "exit clause" for the consumer. That is to say, should the price increase exceed a specified level, the only protection to the consumer is that they then have the option, should they so wish, to terminate the contract. Nothing more. In my experience, very many consumers are unaware of even this basic protection, which is hidden in the contractual small-print, and simply accept the price rises in the belief that they are tied in to a two year fixed contract.

The level of this "price rise cap" can vary significantly: Shell currently offer a "cap" of 3 pence per litre in any six month period, whereas last year, they were offering a cap of 10 ppl/6 months. Calor, on the other hand, are currently offering a cap of 3.5 ppl/3 months. Several companies (including, I believe, Flogas) simply do not include any such clause in their contract. This means that once the customer has signed the contract, no matter how attractive the initial price may appear, there is no effective "upper" limit on the price the supplier may charge, and no way out of the contract. As the market is currently wholly unregulated, this means that the only remedy left to the consumer where there is no contractual cap is to make representation to the OFT, should the price being charged seem hugely unreasonable.

As a factual observation, Mr Shuttleworth referred to the "OFT having a look at the LPG industry". In point of fact, this was actually a prolonged investigation by the Competition Commission, which ran from July 2004 to June 2006 and subsequently made an order that came into effect in April 2009, bringing about substantial change to the market. It was only as a result of this order that it effectively became possible for smaller suppliers to operate.

Ref: http://www.competition-commission.org.uk/inquiries/current/gas/

Anyway, just my 2p-worth. Read/digest/ignore/criticise at your leisure