f you live in one of the 1.5m homes that are not connected to piped natural gas and have to rely on tanker-delivered oil to heat your home, dig out your paperwork and make sure you’re not paying too much.
That’s the warning from Guardian Money reader Paul Burrows, who until earlier this year was being supplied oil regularly under what is called a “top-up” scheme – but believes he was paying as much as 40% more than the market rate for one-off deliveries.
Topping up the complaint about Northern Energy charges
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The 73-year-old pensioner, who lives in a rural spot near York, says he only realised that he was paying so much when he got around to checking his bill following a bout of illness.
For years, households off the mains network have complained that they receive a raw deal from the domestic oil-delivery market; critics claim that pricing is as transparent as a jar of crude. They typically pay at least £1,200 a year for heating oil – or around a third more than they would if they were connected to mains gas.
In 2011, the Office of Fair Trading investigated whether households were being treated unfairly by the oil firms that deliver heating oil, following a spike in prices. That investigation did not find that the big suppliers were colluding to keep prices high, but it identified some key areas in which consumers were being short-changed.
Burrows says he estimates he paid £600 more than he needed to, and urges anyone who uses a top-up scheme – where the supplier checks the customer’s usage and tops up their tank automatically – to check the prices closely.
He says that he was under the impression that services such as top-up, spread payments and boiler breakdown offered by Northern Energy were free to the customer – and did not see any indication that a substantial price premium would be charged for them.
“For my January 2014 delivery of 739 litres I was charged 81.95p a litre. At that time the average market price was 58.93p a litre – a 41% increase. A few days later I obtained quotes for delivering the same volume from several other local firms. They were all in the 56p to 58p range. I even found out that the price I had been charged was 33% above the price that was quoted by Northern Energy to my neighbour at that time.”
Northern Energy, which refused Burrows’s request for a refund, this week declined to discuss his case with Money. It also declined to disclose the charges it makes for top-up rates compared to its spot price.
In a statement, it said: “The customer complained to us and the matter was fully investigated by Northern Energy. The customer then complained to the Federation of Petroleum Suppliers; the complaint was investigated by them, and was not upheld by the FPS.”
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But Burrows points out that the FPS only stated that it could not mediate, and apologised for being unable to settle the matter. The reasons it gave were that the case was “too complex” and that many of the transactions had taken place before its code of practice had been enacted.
So how should you buy your oil? Burrows says that he now only buys in one-off purchases, and only after he has shopped around for the best deal.
During the study, the OFT also received complaints that some suppliers were charging a different price on delivery to that quoted when the order was taken.
According to the consumer group Which?, the size of your order, when you buy (it’s cheaper in the summer) and how quickly you need the delivery will all determine the price charged.
Just as in the gas and electricity market, there are a number of comparison websites – or at least compare the firms where the site has a tie-up with suppliers. BoilerJuice, Cheapest Oil and Fuel Tool are among the websites promising to quote best prices, and in some cases will arrange for the delivery to be made.
MoneySavingExpert advises buyers to use these websites as “the benchmark”, and to then hit the phones to see if your local firm will offer anything better.
“Not all suppliers are physically able to send tankers to your area, so as well as noting down names from the comparisons sites, use the Federation of Petroleum Suppliers’ website to find your local operators. Pick a supplier, call it up and haggle. Don’t be shy. This is a haggling business. You’re just calling to give it a quote and see if it can beat it. The more oil you order, the bigger discount you’re likely to get,” it says.
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Another thing to consider is the fact that the price you pay is greatly influenced by how quickly you need the delivery. Plan ahead and you will save a bit. This week the Fuel Tool website was quoting £480 to deliver 1,000 litres to a house in Hertfordshire in five days but £523 for next-day delivery.
Both MSE and Which? suggest households group together to set up an informal buying club. About 20 people ordering around 10,000 litres of oil is the optimum for obtaining a really good deal. Simply ask people in your area to commit to an amount of oil and obtain quotes for the group every month (or take it in turns), suggests MSE
Even teaming up with just one neighbour can save a decent amount. The heating-oil company should strike a deal and bill each person individually. Most firms are happy to do this, provided you live reasonably close to each other.
Free for all insulation scheme
British Gas is offering to install free loft and cavity insulation and is targeting poorly-insulated homes – whether the owner is a British Gas energy customer or not.
While most of the free insulation schemes run by the energy providers are only given to those on incomes of less than £15,860, or on certain benefits such as pension credit, the British Gas offer is available to all – irrespective of income.
The company is looking for homes only with little or no insulation. You won’t get it if you have solid walls and haven’t got cavity walls. Any existing loft insulation will have to be less than 50mm thick and cover less than a third of the loft to qualify for the deal.
Note that properties built after 1 January 1983 should already have cavity wall insulation, and those built after 1 January 1991 should not need any additional loft insulation.
British Gas will decide if your home is eligible on a case-by-case basis, but says 90% of homes qualify. Call 0800 294 9126.
Meanwhile, the Home Heat Helpline is encouraging people on low incomes to call 0800 33 66 99 to find out what they could be entitled to – from the other energy company schemes.
It says one in eight British households is entitled to help with home heating from energy companies this year.
Eligible houSseholds include all those living in certain deprived areas as well as low-income pensioners, disadvantaged families with children or those with a disability that live in a rural area.
Source: http://www.theguardian.com/
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