Prime Minister Truss announces help for heating oil

in_my_bumble_opinion

There is no way way for the gov to know which households are on oil-fired heating and it would be a costly thing to find out. 

So I think we can rule out a direct payment to people with oil-fired boilers.

Somehow, they have to set a cap on suppliers prices to domestic consumers only. That will be a tricky thing to administer I would think as lots of heating oil is sold to businesses. Some farms, for example, would need to be supplied at two rates....one for the farm, one for the farmhouse. If one is subsidised why not order/fill only that tank, then transfer the oil to the commercial tank?

Difficult thing to administer I reckon.

strawb_shortcake

in_my_bumble_opinion said:

There is no way way for the gov to know which households are on oil-fired heating and it would be a costly thing to find out. 

So I think we can rule out a direct payment to people with oil-fired boilers.

Somehow, they have to set a cap on suppliers prices to domestic consumers only. That will be a tricky thing to administer I would think as lots of heating oil is sold to businesses. Some farms, for example, would need to be supplied at two rates....one for the farm, one for the farmhouse. If one is subsidised why not order/fill only that tank, then transfer the oil to the commercial tank?

Difficult thing to administer I reckon.

I can't help thinking it's going to be similar to the hardship grants operated by the councils for covid. Granted that stems from it also being labelled a discretionary fund. But it would seem a bit unfair to make some in society go through essentially means based testing to stay warm this winter.

NedS

QrizB said:

NedS said:

So lets look at some prices and work out what "equivalent support" may look like:

A litre of kerosene produces 10.35kWh of energy

Under the April to Sept price cap, gas was priced at 7p per kWh. The old price cap for April to September was set at £1971/year and will rise to £2500/year for the average consumer - an increase of 26.8%.

If we apply a 26.8% increase to the cost of gas under the April price cap (7p) we get a price of 8.9p per kWh

An equivalent price for oil would be 92p per litre giving a comparable 8.9p per kWh, which is not far off the current price, so I think it is unlikely us oil users would get much help at present, but may do so if the price of kerosene were to rise sharply.

The factsheet here:
https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022
... gives a capped gas price of 10.3p/kWh. By your calculations that's equivalent to 107p/litre for kerosene, and (assuming propane at 7.07kWh/litre) 73p/litre for LPG.

Thank you for providing those figures - I could not find them when I did my analysis.

I agree that the EPG price for Gas is broadly equivalent to the current kerosene price, so I don't think us oil users are massively missing out on anything based on the current pricing - seems the cost of heating a property with gas or oil are broadly similar at current prices.

Francis63

I think I have decided to forget using the oill heating and just heat the immersion electrically for hot water for now. 
Will use portable electric fan for heat in whichever room I'm in. 
I have now run out of oil and am loathe to top it up at more than double last years price and no help. 
There is still 5% VAT on the heating oil. 
That should come off for starters - it's not a luxury is it. 

QrizB

Francis63 said:

I think I have decided to forget using the oill heating and just heat the immersion electrically for hot water for now. 
Will use portable electric fan for heat in whichever room I'm in. 
I have now run out of oil and am loathe to top it up at more than double last years price and no help.

It's a curious choice to use electricity at 28p/kWh (soon to be 34p/kWh) to provide heat rather than oil which, even at 90p/litre, is a third of the price.

Francis63

QrizB said:

Francis63 said:

I think I have decided to forget using the oill heating and just heat the immersion electrically for hot water for now. 
Will use portable electric fan for heat in whichever room I'm in. 
I have now run out of oil and am loathe to top it up at more than double last years price and no help.

It's a curious choice to use electricity at 28p/kWh (soon to be 34p/kWh) to provide heat rather than oil which, even at 90p/litre, is a third of the price.

I didn't realise it would be that much more expensive with just electricity.
I just want to wait a week or two to see if there is an announcement.

As I have to pay 1,000 upfront for oil that will hopefully last all winter I'll be gutted if days later a voucher is issued for 50% off your next bill for example. Just need to know what the help will be before it's too late.  

I've no income at the moment, and not entitled to any benefits, just living off savings until they're gone.

Francis63

Email just through from Boiler Juice - group (oil club) supplier :-

Liz Truss’s energy price guarantee and what it means for you. Hello,   We understand that the last few days have been particularly difficult for many households across the U.K, with the passing of our beloved Queen and concerns around living costs.   It’s important we update you on any news that impacts heating oil homes. So, this weekend we're summarising in simple terms what this week’s energy announcement means for you.   We’re dedicated to keeping you up to date with the latest heating oil news.   On Thursday, our new prime minister Liz Truss announced an energy price guarantee of £2,500 per year for a typical household that relies on electricity and gas to heat their homes. The cap will last two years and is based on the average household bill.   Even though heating oil households are not eligible for the energy price guarantee, it was announced that there would be equivalent financial support provided to heating oil homes this winter in the form of a discretionary fund.   Liz Truss: “For those using heating oil, living in park homes, or those on heat networks, we will set up a fund so that all UK consumers can benefit from equivalent support.”   Once we have the details on how the heating oil fund will be distributed, we’ll be in touch to keep you fully up to date.   The government has also announced that the funding of £400 to help reduce energy bills will continue. Extra funding for the most vulnerable homes is available, which means those homes can receive a total of £1500 towards their energy bills. This rebate will be organised via your electricity provider.

We will continue to monitor the news to make sure we share as much helpful information as possible.   You can find out more about the recent updates on our blog. Yours sincerely,   The BoilerJuice Team

comeandgo

I’m waiting on a heating engineer to come and repair the water heating part of my oil boiler.  I’m having to use the immersion and it is using around 8 to 12 extra units a day, not a cheap way to heat water.

Rdwill

8 to 12 units a day.

Blimey are you bathing everyday or does your tank have no insulation?

I have an immersun and regularly check the units put into the tank by it these average between 3 and 4 a day.  

Household is 2 adults and a teenager doing normal stuff, I would caveat the shower is electric.

tetrarch

Not to appear too cynical but the price of wood pellets has increased from ~£500 a tonne to ~£600 virtually overnight. This compares to prices of ~£300 per tonne Dec-21

Regards

Tet