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.