Belfast Telegraph

Saturday 19 April 2014

Editor's Viewpoint: Home heating oil regulator needed

As temperatures continue to plummet many people in Northern Ireland are facing great difficulty in keeping warm.

Chief among them are pensioners and families on low incomes who have seen the price of home heating oil rise rapidly in recent weeks. For them it can be a choice between putting food on the table or turning on the central heating. That is a choice that no-one should have to make.

Whether justified or not, there is a perception that oil suppliers are taking advantage of the heavy demand by raising prices. At the beginning of last month 900 litres of oil cost on average just over £358; now the figure is slightly over £396. In two days alone the average price crept up by £12. It is difficult to believe that these increases are triggered solely by rises in the cost of wholesale supplies.

Those who use emergency 20-litre drums of heating oil to keep their heating going because they cannot afford deliveries of 500 or 900 litres are facing a real rip-off. The cost of a drum is almost twice the equivalent price of 20 litres delivered to the door. Of course there are economies of scale and the drum, labelling and distribution all add to the price, but again the mark-up appears excessive.

While suppliers deny that they are profiteering such is the vital nature of the home heating oil industry that calls for regulation are growing. If gas, electricity and water suppliers are subject to independent scrutiny, there does not seem on principle any reason why oil suppliers should not face the same oversight.

A regulator could determine what is a fair price for the fuel. At the moment the cost difference between suppliers can be significant, undermining the industry's arguments that charges are determined by global factors beyond its control. Regulation would mean that oil prices were open and transparent - surely a benefit to both customers and suppliers.

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