Industry hits back over heating oil claims
Published 07/11/2008 | 12:50
The Consumer Council was told to get its facts right today after threatening to refer the price of home heating oil to the Office of Fair Trading.
Householders were paying more than 50% more for oil to heat their homes than in February 2007, the last time crude oil prices were at the same 58-dollar level as now - £416 compared to £275, they said.
Eleanor Gill, chief executive of the Consumer Council in Northern Ireland said unless the home heating oil industry could assure consumers they were paying a fair price they would consider referring the pricing to the OFT.
The industry swiftly hit back, telling the council to do their home work on pricing.
David Blevings of the Northern Ireland Oil Federation said: "It is not crude oil which is heating your house or running your car. The retail price of home heating oil is based on the cost and demand for the refined product at Rotterdam and is sold in dollars.
"If the Consumer Council had done its homework they would see the figures show there is a 50% increase in the wholesale price of kerosene."
And he added: "If they had the courtesy to come and ask the industry in the first place we would not be grandstanding in the media and making threats."
But Ms Gill said there was a total lack of openness about why prices were so high.
She said: "From February to June this year, when the price of crude oil was at its highest, consumers were paying the price as it rose - when crude oil went up, the price of home heating oil went up.
"Since June and the height of the market, we see the price of crude oil coming down at twice the rate of home heating oil.
"We are left with a 51% gap - that is £141 for a 900-litre fill - which is unexplained compared to when crude prices were last at this level."
The figures did not add up and the council was considering using its powers to make a super-complaint to refer the issue to the Office of Fair Trading unless there were swift answers over what looked like profiteering to many, she warned.
Northern Ireland's Big Four local banks were forced to slash private account charges after being taken to the OFT by the Consumer Council on a super-complaint a couple of years ago.
Oil peaked at some 140 US dollars a barrel in the summer before falling back to 58 dollars this week, but the Consumer Council said heating oil prices had fallen only 25%.
"The evidence does not stack up to any explanation you get from the oil industry," said Ms Gill.
"A lag doesn't explain it because there was no lag on the way up and there is a huge lag on the way down."
The Consumer Council's latest price check on oil in Northern Ireland showed substantial differences of more than £50 from dealer to dealer.
The top price it quoted for a 900-litre fill was £440, the lowest £385, with an average of £416.
Ulster Unionist MEP Jim Nicholson said he was fed up with the lame excuses of the heating oil companies who had not passed on the drop in oil prices to the consumer and said the Government should be forcing them to act.
Mr Nicholson said, "Wholesale oil prices have dropped sharply and the petrol retailers have acted, albeit under duress. The heating oil companies have not to date acted and costs are still astronomically high.
"The population of Northern Ireland, and particularly the most vulnerable in society, are struggling with the basic cost of living. This is not helped by companies sticking the arm in unnecessarily.
"We are all fed up with the lame excuses of the heating oil companies while the oil companies continue to make obscene profits. They should act now and if they refuse the Government should force them to act."