About 3.6 million UK households are off the gas grid, of which about 1.5 million use heating oil. Are you one of them, and if so, how are you coping with the price increases this winter?
In the 2010 winter, the average price of heating oil went up by more than 70% in only three months – from 41p per litre to 73p per litre.
This is ten times the rate of increase endured by normal gas customers. And yet, the cost of crude oil only went up by 19% in the same period.
What’s wrong with the heating oil market?
Many of our members have raised their concerns about rising heating oil costs as well as other concerns, such as the fluctuation of heating oil prices, security of supply, theft and the lack of competition and transparency.
We’ve fed these concerns to the Office for Fair Trading (OFT) which was conducting a study into the off-grid energy market. But in October 2011 the OFT found that competition works well in this sector and that regulation is not needed. It did, however, identify problems with consumer protection.
So is everything OK in the heating oil market? One member wrote to us to share his recent experience after getting an oil delivery:
‘The price was marked as 79.51p a litre plus VAT. A quick trawl revealed that others were charging between 56 to 58p. I was furious – this was profiteering on a grand scale. I contacted the company and asked them to take it back. They countered by immediately offering it to me for 58p. There was no explanation as to why I had been so grossly overcharged.’
The price quoted by this member and the average on BoilerJuice’s website (see graph below) seem to indicate that heating oil prices are at about 60p/L this winter.
Cutting the cost of heating oil
Do you use heating oil and what has your experience been this winter? In a recent Conversation, Malcolm Fry told us how he cuts costs:
‘It is generally much cheaper to buy heating oil in bulk, in the summer, rather than to have several, small top-ups, in the depths of the winter. This is particularly true of remote, rural locations. By increasing one’s storage capacity (a bigger, or additional, tank), it is possible to substantially reduce annual costs.’
Have you got any cost-saving tips on how to find the best deal? Are you tied in with one heating oil company or perhaps you take part in a community/group buying scheme?