BEN LAKE MP has welcomed calls for stronger protections to be implemented for off grid households following the clear evidence presented to the Competition and Markets Authority (CMA).
The Ceredigion Preseli MP has previously highlighted in Parliament the gaps in the protections available to heating oil customers compared to those on gas and electricity networks. The lack of regulatory framework has led to inconsistent standards of support for vulnerable customers and a lack of access to alternative dispute resolution if customers cannot resolve disputes directly with suppliers.
The CMA recently launched a market study into the heating oil sector after conflict in the Middle East caused significant disruption and increased average retail prices.
The regulator formally reported the findings of this investigation this week, which found that although the home heating oil market is generally competitive and suppliers had not profited materially from the crisis, consumers are not as well protected as those connected to the grid.
Heating oil is essential for many households, especially in rural and off grid communities. These areas will also generally have less choice of suppliers and face higher prices due to the higher costs of serving these areas.
Heating oil is typically bought in large volumes, meaning households can face bills of around £500 or more at a time. As a result, the CMA is also recommending a review of rules and regulations around minimum order volumes to allow people to buy smaller amounts of heating oil.
The CMA has now committed to working with governments, regulators and industry to take forward its recommendations and continue discussion with suppliers on the proposed compensation scheme.
Ben Lake MP said: “I welcome the Competition and Markets Authority’s decision to call for a new regulatory regime for heating oil suppliers, and its announcement of a compensation scheme for those households who were impacted by last minute cancelled orders earlier this year.
“The CMA’s recommendations that heating oil suppliers meet minimum standards, signpost available payment plans and minimum purchases, and register vulnerable households will all help to better protect off-grid customers during an energy spike or times of crisis.
“These recommendations will help heating oil customers, and are to be welcomed, but I will nevertheless be asking for similar steps to be taken to help protect off-grid LPG customers. The conclusions of the CMA’s report will not surprise residents of Ceredigion Preseli.
“Many saw their regular fuel prices changing at short notice during the Middle East fuel crisis, and I am aware of many cases where the customer was not informed of the price for their delivery until the lorry had arrived at the property.
“Ceredigion Preseli has one of the highest proportions of households that are not connected to the mains gas grid in Great Britain, and as a result the war in the Middle East had a disproportionate effect on the prices residents were forced to pay for their fuel.
“Indeed, according to the CMA the average price per litre increased by 42p in March of this year, and retail prices rose 92% at their peak which confirmed what dozens of constituents had told me.
“I welcome the announcement that there will be compensation paid to those impacted, but regret that the eligibility and application process remains unclear.
“I have therefore asked for further detail on how customers can ensure that they receive these payments as I am determined that constituents of Ceredigion Preseli receive every penny of compensation that is owed to them.”
