Bulk LPG - Cheapest suppliers / supply route?
Comments
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frozen_wastes wrote: »I wrote to my MP about this, as it seems like very sharp practice. No reply, but I suggested to him that buying LPG should not bind you to a supplier for 2 years as it's unlike buying any other fuel for either your house or your car.
You own your car's fuel tank. You own your domestic oil tank. You can fill them with whatever you choose. If your car's fuel tank was leased from BP, then BP would be within their rights to say "BP fuel only".I suggested to my MP that tank ownership should transfer automatically and seamlessly to the next supplier on the basis that all tank owners are subject to the same safety regulations. So the condition of the tank should not be a question when ownership is transfered unless the tank was already condemmed by the existing owner.
Let's say that Flogas own your tank. It gets to 50% full, and Calor top it up. Do they own it now? It gets to 55%, and Flo top it up. Do they own it now? It gets to 60% and Countrywide top it. Do they own it now?
If you're removing the contract, you really need to de-link ownership and filling. Which means you own it. Well, you can do that now - but it means you are responsible for the safety checks, pressure testing etc.0 -
Let's say that Flogas own your tank. It gets to 50% full, and Calor top it up. Do they own it now? It gets to 55%, and Flo top it up. Do they own it now? It gets to 60% and Countrywide top it. Do they own it now?
That's the thought that was going through my mind. In a world of old fashioned paperwork, that method of ownership transfer would be far too cumbersome and impractical. But we have no longer need to live in an old fashioned world of paperwork. There's no reason why ownership couldn't be be transferred digitally. In which case, this style of ownership transfer wouldn't be any hassle.If you're removing the contract, you really need to de-link ownership and filling. Which means you own it. Well, you can do that now - but it means you are responsible for the safety checks, pressure testing etc.
As you say there's nothing to stop anyone owning their own LPG tank. But from what I've read, they'll find that no-one is willing to top it up.
My overall desire is to see better competition between LPG suppliers. How that's achieved is a matter of debate, my thought's above are just one possibility. It doesn't look like 2 year supply agreements offer any price security as I've just found out. So I'm thinking: if we can't have price security, then there should be mechanisms for better market competition instead.8.9kw solar. 12 panels ESE, 16 panels SSW. JA solar 320watt smart panels. Solar Edge 8KW HD wave inverter. Located Aberdeenshire0 -
frozen_wastes wrote: »That's the thought that was going through my mind. In a world of old fashioned paperwork, that method of ownership transfer would be far too cumbersome and impractical. But we have no longer need to live in an old fashioned world of paperwork. There's no reason why ownership couldn't be be transferred digitally. In which case, this style of ownership transfer wouldn't be any hassle.
But the point is more one of whether the supplier who have the bulk of the gas in the tank own it, or simply the johnny-come-lately who top it up a bit.As you say there's nothing to stop anyone owning their own LPG tank. But from what I've read, they'll find that no-one is willing to top it up.
If ownership becomes more widespread, then there would be a much greater willingness, simply because otherwise they would sell little gas. Obviously, you would need to prove the tank met all the safety requirements at the point of fill...0 -
The tank ownership issue is just a mechanism that the LPG companies use to make moving more difficult. This should have been addressed by the CC when they carried our their market investigation. The LPG market is now the only energy market where the product and infrastructure are bundled.
The easy solution to this would be for the LPG companies to sell the tanks to a third party that then leases these to the customers. It would be the responsibility of the leasing company to carry out the inspections and ensure compliance with the siting rules (which are set by the LPG companies currently using their own trade body as the front). If the siting of the tanks was such an issue then existing owners should be forced to ensure compliance at all times and not just when you switch tanks.
At the end of the day, off-grid households do not have sufficient numbers to force these issue onto the political agenda.0 -
As my contract is coming to an end I obtained a very good quote from LPGSave of 31.5p/l fixed for one year and a "Cap" of 5ppl for year 2. Sounds good. However a close look at their T&C's reveals something interesting. I quote:
My highlighting. So the 5ppl limit is really nothing of the sort, it's actually a cap of 5ppl plus they can pass on ANY increases in wholesale prices.8.2 Where the cost of supplying the LPG increases due to:
8.2.1 any underlying increase in the cost of LPG as evidenced by reference to the relevant Platts LPG price index for North West Europe (taking into account any relevant exchange rate issues);
8.2.2 any increase in our direct transportation costs; and/or
8.2.3 any increase (not related to clause 8.2.1) in the cost to us of purchasing LPG from our suppliers, we retain the right to pass on such increases to you by increasing the price of our LPG but subject .
We may increase (in a single step or a series of steps) the price of LPG for the reasons listed at clauses 8.2.2 and 8.2.3 by no more than five pence per litre in any twelve month period.
Please note that no such limit shall apply to any increase which reflects an increase in the underlying cost of LPG (as set out at clause 8.2.1).
For the avoidance of doubt, the maximum increase in the price of LPG (the “Upper Annual Limit”) in a given period is:
(a) the cost increase over the corresponding period due to clause 8.2.1; plus
(b) the cost increase over the corresponding period due to clauses 8.2.2 and/or 8.2.3 together, where (a) is an unlimited increase and (b) shall be limited to a maximum of five pence per litre in any 12 month period.
I've now renegotiated a new contract with my existing supplier, Countrywide at a slightly higher initial price (34ppl) but with a guaranteed, total cap of 5ppl for year 2 with NO getout clauses and a substantial sweetener of free gas.0 -
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It isn't that difficult to put a mechanism in place that prevents an LPG distributor from owning any part of the tank company. Absent any commonality of ownership there would be no reason for the tank rental company and LPG distributors to work in concert.Is it just me who suspects that any such third-party leasing company may not be utterly independent of the gas suppliers...?0 -
One thing's for sure, it would almost certainly increase the tank rental cost massively.0
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Why would it, there is one of the following happening at the moment:One thing's for sure, it would almost certainly increase the tank rental cost massively.
1. Tank rental is profitable in it's own right or ;
2. Cross-subsidisation or ;
3. The LPG suppliers are Santa Claus
Since 3 is unlikely to be the case this leaves 1 or 2 as the most likely. If it is 1 then that profit will still exist for the independent rental company (or companies if you want to have competition). If it is a single company then they should have regulated pricing.
If there is cross-subsidisation then increasing rental prices would, if the market was functional, lead to reduced ppl costs of LPG.0 -
You forget the increase in costs.0
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