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Home oil: stop the rip-off

By Victoria O’Hara and Linda McKee

The heating fuel industry came under massive pressure today to bring drown its prices down after it emerged that half a million Northern Ireland householders are paying 50% more than last year to heat their homes — despite the plummetting price of crude oil.

The Consumer Council has threatened to refer the issue of home heating oil prices to the Office of Fair Trading unless oil companies can explain why Northern Ireland people are paying so much.

In Northern Ireland 70% of households rely on oil which means that seven out of 10 people — or 500,000 households — are being ripped off.

A Stormont minister today said there was a strong case for regulation of energy prices as a series of political and charity representatives joined the growing demand for the oil companies to pass on the full reduction in prices to consumers.

Shock statistics show that while the price of oil has crashed to $58 a barrel, the full benefits have not been seen by householders.

According to the consumer watchdog the last time crude oil was at this week’s price was in February 2007. Then consumers paid on average £275.75 to fill a

900 litre oil tank. Today, they are paying £416 — a staggering 51% more.

Last November crude oil was more expensive but the average price of home heating oil was still 10% cheaper than today.

The Belfast Telegraph’s Price Watch campaign has led the way in monitoring the price of home heating oil, which peaked in July of this year.

Although it has dropped since then the campaign has raised concerns that this has not kept pace with the dramatic drops in the price of crude oil.

The Consumer Council is now threatening to deliver a “super complaint” on the issue to the Office of Fair Trading. Super complaints are made when it is considered that there is any market feature that appears to be significantly harming the interests of consumers.

Steve Costello, Chairman of the Consumer Council, said: “Consumers are paying a massive 51% more to fill their tank than they did last year. The home heating oil industry has a responsibility to prove to customers that they are not paying over the odds to fill their tank.”

He added that consumers will no longer accept at “face value vague explanations” from the oil industry about currency exchange rates and demand.

“Since the summer the cost of crude oil has fallen by more than half and consumers have anxiously waited to see the full benefit being passed on to them when they fill their tank. In our view this has not happened in the home heating oil industry.”

But David Blevings from the Oil Promotion Federation said that prices have dropped by more than 25% from July.

He added that latest Sutherland figures published in October shows that consumers in Northern Ireland buy their home heat product at 4% below the UK average and almost 10% lower than the Republic.

“This proves the competitive transparent market local distributors operate in,” he said.

“Distributors only pass on increases or reductions as dictated by the international market and have no control over wholesale costs.”

He added: “While crude price movements can be an indicator of trends there is no direct correlation with retail prices.

“The retail price of home heating oil is based on the cost, demand and availability of refined product.

“Refined products are sold in dollars and the strong dollar and general tightness in supply has had an adverse effect on the retail price in recent week.”

Environment Minister Sammy Wilson said he was meeting people every day struggling to pay their energy bills.

He added: “Especially coming into winter many older people are living at home, don’t have a warm office to go to and they are fearful of how they are going to manage over the winter. There is a very strong case to see if we need some regulation of this.”

Goretti Horgan spokeswoman for Northern Ireland Anti Poverty Network said: “Our members have been telling us for some time that home heating oil here is considerably more expensive than in England, Scotland, Wales and the Republic.”

Sinn Fein’s Mitchel McLaughlin said series questions needed to be asked about the process of setting prices.

Ulster Unionist MEP Jim Nicholson added: “I am calling on the Government to force these companies to pass the savings on to customers.”

Industry hits back

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