Discretionary Fund for Heating Oil and Bulk LPG

wwally

The announcement of the support for energy prices from October 1st included a "Discretionary fund for heating oil users". I assume this also includes Bulk LPG. The statement said it was aimed to provide "equivalent support" to that offered to mains fuel users.

No further information has yet been released.

Given these markets are essentially deregulated, the way this fund will be deployed is of great interest.

Questions like:

1. Whose discretion is it?
2. How much is available?
3. How will suppliers apply the fund fairly? How do we know they are not inflating the base price before giving a discount?
4. Do all bulk suppliers offer the scheme?
5. How does it work with budget accounts?
6. When does it apply? (I assume 24 months from 1/10/22)

Getting_greyer

Yes an odd one and will be interesting to see how heating oil is subsidised.  Could it be essentially a one off quantity of fuel per household per year is effectively paid by the state. Could it be the gov guarantees to pay the surplus price above £x p/l.  Or would consumers have to apply to suppliers for hardship funding....which probably means everyone asking.

Worry is I guess that they create a price floor for 2 years- which will either be good or bad for different consumers.

I'm also thinking that once details are released there may be a surge in demand immediately after pushing price up.

Sun-Is-Fun

When are details of it going to be released?

wwally

This is the current state of official information from https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

drsquirrel

The £400 is meant to be 200/200 gas/electric but paid on the basis of the electric meter?

So Oil/LPG won't really need extra?

The document above specifically says offgrid, which would suggest no electric, I don't see many of us on Oil/LPG not having electric supplies already.

strawb_shortcake

I can't help thinking that with the use of discretionary, people will have to apply and meet certain criteria. 

As I decided last weekend to order before prices increased any further and that will see me through a good while I don't expect to benefit however it's implemented

QrizB

We'll have to wait and see, but hypothetically they could decide to cap bulk oil and LPG prices at the same level as mains gas.

Eg. if gas is capped at 10p/kWh, oil and LPG could be capped at the same price.

This would mean a price cap of around 100p a litre for oil, and 70p a litre for LPG.

wwally

QrizB said:

We'll have to wait and see, but hypothetically they could decide to cap bulk oil and LPG prices at the same level as mains gas.

Eg. if gas is capped at 10p/kWh, oil and LPG could be capped at the same price.

This would mean a price cap of around 100p a litre for oil, and 70p a litre for LPG.

Those aren't particularly attractive cap figures! Market rate for me is below both at the moment (c 95p and 55p). They did say the saving would be equivalent for these fuels.

kassy64

We'll have to wait and see, but hypothetically they could decide to cap bulk oil and LPG prices at the same level as mains gas.

Eg. if gas is capped at 10p/kWh, oil and LPG could be capped at the same price.

This would mean a price cap of around 100p a litre for oil, and 70p a litre for LPG.

I suspect majority of oil/lpg users are currently paying less than the figures quoted above already
I get the idea though and that would be the way to go, cap the per litre rates at today's prices or slightly above for the next 2 years. The oil/lpg companies can then claim back the difference from the government.
The word 'discretionary' is a curve ball though as that almost implies it will not be for everyone 😒

kassy64

Further to my comments above, I have had a look at the link provided and taken a quote from it shown below. reading that does make me wonder whether it will be only for vulnerable/hardship cases, BUT, PM did say everyone would get some help so not sure as I'm confusing myself now 😊

An additional discretionary fund will be available for those households who are outside of the schemes. For example, households not on standard gas / electricity contracts.

strawb_shortcake

wwally said:

QrizB said:

We'll have to wait and see, but hypothetically they could decide to cap bulk oil and LPG prices at the same level as mains gas.

Eg. if gas is capped at 10p/kWh, oil and LPG could be capped at the same price.

This would mean a price cap of around 100p a litre for oil, and 70p a litre for LPG.

Those aren't particularly attractive cap figures! Market rate for me is below both at the moment (c 95p and 55p). They did say the saving would be equivalent for these fuels.

I looked back at my last orders 

Sept 21 - 750l £364
Sept 22 - 750l £680

Capping at £1ppl would be a further increase, yet I guess that's not so fundamentally different to electric and gas.