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Heating oil suppliers told to pass savings onto households – updated

Heating oil suppliers are under fire for not decreasing prices for consumers despite crude oil prices falling by close to a third this year

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The Treasury is calling for a reduction in heating oil prices, in line with wholesale costs

Update – The Federation of Petroleum Suppliers (FPS) has issued a statement denying some of the below claims: “There has been a drop of 12% drop in UK oil prices since last October and in fact the cost of home heating using an oil condensing boiler in a newer property is now less than using an equivalent gas boiler.  Oil is also currently cheaper than Electricity.” You can read more here.

A meeting between representatives of the oil heating industry and ministers at the Treasury is scheduled to take place tomorrow, to discuss lowering the cost of heating oil in line with oil prices across the globe.

The move would be welcomed by the estimated 1.5 million consumers who rely on heating oil to keep their homes warm. Many of those who rely on heating oil live in remote areas of Scotland where it is not possible to access the gas grid.

‘They need to be passing on the fall in oil prices just as filling stations do’

The meeting was announced by Chief Secretary to the Treasury Danny Alexander, who said he had been pushing for petrol prices to fall in line with global oil prices and now wanted to do the same with heating oil.

Speaking on the issue he said: “There are around 1.5 million homes in this country that are heated using heating oil. It’s more expensive than electric heating. Those households tend to be in fuel poverty and the market is less transparent.

“I will be holding a round table with that industry in the Treasury on Thursday to get that message across to those organisations that they need to be passing on the fall in oil prices just as filling stations do.”

Gas and electricity suppliers under similar pressure

The situation somewhat mirrors what is already taking place in the domestic gas and electricity market, where suppliers have been asked why prices have not fallen despite a decrease in wholesale costs.

This is one of the reasons that the domestic energy market is currently being investigated by the Competition and Markets Authority (CMA). The full investigation is expected to be completed in December 2015.

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  • Country Gent

    This is just ill-informed political posturing by the Lib-Dems. In fact the price of heating oil has fallen dramatically – the only heating fuel to do so. It now costs around 48p a litre and is still falling. At it’s most recent high in April 2013 the heating oil price was around 69p. Compare this to the fluctuations in crude oil prices and you’ll see that the drop in price has been passed on. You wonder how Danny Alexander got his job in the Treasury when he can’t interpret basic data such as this. Heating oil is currently the cheapest alternative to mains gas and the price is at a four year low.

  • Tom

    Country Gent – Yes I agree but it takes too long for the decrease in Brent to be passed on. Our local supplier says that its because their oil was bought at a higher rate which is true for a day or so but they rocket the price up as soon as Brent increases. The suppliers work the price between them or at least they do in Northamptonshire. Plus there are 3rd party’s such as Boilerjuice bumping up the price.

  • St

    My understanding Oil prices are in fact influenced significantly by Opec, Boiler juice compare prices just Like other comparison websites they pull a range of prices from multiple suppliers and Just like U switch recommends it pays to shop around and find the best price.

  • JohnRTO

    I don’t think it will take too long for the OPEC news to increase heating oil prices. My last order was already higher than earlier in the year! It definitely pays to shop around, boilerjuice always help me to get a lower price.