Martin Lewis: Heating oil & LPG price hikes – are firms playing fair? We need your feedback…

Jaybee_16

Here in rural west Wales, heating oil at the end of February was around 62p per litre. I ordered on 3 March at 80ppl with delivery expected on 17 March, two weeks later. The delivery actually took place on Friday 6 March, so only 3 days later.

Watching the price since, it rose to 150ppl, then no deliveries in your area for around two weeks.

Availability returned last week at 150ppl and is now 141ppl.

Grateful to Homefuels Direct for the prompt delivery.

Mikeyorks

I topped up with 1000 litres in early Feb, fortunately, at £587.90 (VAT inc). A few days ago Homefuels Direct were quoting just over £1000 more at £1588 for that quantity.

I simply don't comprehend the Chancellor and Ed Milliband seeking clarification if " any company is exploiting the current crisis to make excess profits at customers' expense.". Are they blind or simply stupid. Homefuels Direct added 25% to their price on the first full day of the conflict, which is long before any increases had washed into the UK supplies.

Go further back and (10 years an oil user) you will readily find price hikes every UK cold period which could only be fully justified by greed. There are undoubtedly delivery pressures at such times as people don't organise themselves / tanks are inadequately sized ………… but the majority increase was simply profiteering. As it is now.

Heedtheadvice

It is easy to blame the suppliers as profiteers. First bear in mind their increases costs. Refined crude cost increased ( and reduced refineries in the UK), general business cost increases that we should all be aware of then on top of that severe shortages pushing up global prices ( shipping losses, tankers effectively stranded...and then panic buying.

I am not on heating oil but my daughter is. What would have been something like 70p per litre has shot up to about 125p per litre owing to demand and supply issue. She was about to run out so wanted to order her routine 500litres. Her good local regular supplier told her that they had very little stock as there had been lots of panic buying, a likely 2 week (ish ?) delivery wait and unknown cost. They came good just a few days later to her relief ( warm house, hot water) but cost.

Thanks Donald and friends

mrjwalker911

I tried to call North Warwickshire Council yesterday 20th mar asking when they will publish anything in preparation for the upcoming oil help. The reply I got via email is that they know nothing about it and have had zero communication from the government !! so I think the 1st April will be a failure - government failed again.

fatbelly

I have heard a proposal that money will be offered to those who qualify for council tax support.

I would have thought, in any given area, those who are on CTS AND use heating oil AND are aware of the scheme will be a very small number

Mattyd1234

the government measures are farcical. We don't fit into the 'vulnerable' category and can't afford to fill the oil tank which now costs over 3k to fill. Other than the rich no-one has that sort of money (a months wage) floating around. How is it fair that the working class cannot afford their heating… pay me to install solar and a heat pump now that's a different story

fatbelly

As is usual, the government have batted this down to the local councils, to give grants through the crisis and resilience fund, which comes in appropriately on 1st April.

Each council has to devise its own scheme with the money it has been a!located

If whatever Rachel Reeves was talking about yesterday has any further help for heating oil users I guess someone will let us know eventually. Personally, I've filled up on the basis that things will only get worse and no-one's going to give me any help.

Frances63

Once again, those of us on heating oil are not getting the benefits of the price cap that those heating their homes & water with gas/elec automatically get.

We don't know (again) what the circumstances of any purported help will be and neither (yet) do our individual councils. I don't trust that I'll get any help.

My Income from my private pension (taken a bit early because of a covid caused redundancy) is £1002 per month.

Nearly a quarter of it goes in council tax, another half on the mortgage and the rest is not enough to cover food/fuel/bills/insurance/etc.

There is no excess, I use my savings every month, but they won't last forever. I can't afford the mortgage hike, the council tax hike, the car tax, any holidays at all, family gifts, vets bill and certainly not a doubling (or more) in oil costs!

I have more than £16,000 in savings, but this has to be divided into the next 5 years to boost my private pension until I receive the state pension, or I can't survive. My savings means I don't qualify for any benefits or help of any kind. Because of my self reliance, responsibility and self restraint over the years, I am penalised.

I am too old to start a new career and any new jobs are all at minimum wage & frankly not worth the pain. Also 100% of that minimum wage would be taxed and I already have made my full NICs, so no benefit to me there. Costs of travelling to work etc mean there wouldn't be much income left after tax anyway.

Looks Like I won't get heating oil help as I don't claim benefits and any help will likely only be for those that do.

It's so unfair when other fuel help is universal, not means tested. That means we are not treated equally, and that is simply wrong.

Even the government profits out of the extra vat made on the higher priced heating oil.

I am heartily sick of this government; in fact all of them. There must be a better way to live.

Downthedrain

I'm not clear on where the price increase originates from. Inside of two days from the outbreak of war, my price went from 63 pence per litre to £1.23, then £1.33 a day later. Exactly where in the supply chain is that increase generated?

My own view is that any public-funded subsidy to assist homeowners is simply being paid back through the price of domestic heating oil to reward the system that generates the increase in the first place. Is the answer not to investigate the supply chain mechanism?

Can you begin to imagine if the price of road fuel (diesel) went from £1.38 a litre to £2.90 within three days? That's the same increase as heating oil, but why the difference?

QrizB

I'm not clear on where the price increase originates from.

Economics 101 would suggest that it's supply-and-demand working as expected.

The UK heating oil supply network - from refineries through wholesalers to retailers - is set up to supply a certain amount of oil per week. There's only so many tankers, drivers, and only so much supply available.

When the current unpleasantness started, oil prices began to rise. People who might not have otherwise ordered oil for several weeks or months think "I should order now, before prices go up". All of a sudden there are more orders in the system than it's capable of filling.

Putting prices up would normally reduce demand, as some people won't want to pay the higher price. Eventually a new balance is reached where only those who can afford the higher price keep their orders open.

However, this can't last indefinitely. All this extra oil is going into tanks to be used later, possibly next winter. Eventually everyone who's willing to pay more than eg. £1 a litre will have a full tank, and demand will fall. When demand falls, prices will follow it.

Can you begin to imagine if the price of road fuel (diesel) went from £1.38 a litre to £2.90 within three days?

Road fuel demand is more flexible; a surge in pricing like that would see demand fall hugely as private motorists stay at home. Roads would become as quiet as they were during lockdown.

Commercial drivers would be most heavily affected.