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North MPs help win inquiry into heating oil 'profiteering'

Richard Moss | 15:34 UK time, Tuesday, 25 January 2011

Domestic oil delivery

The price of domestic oil deliveries like this one increased by around 50% in December.

We all know that the price of heating our homes seldom seems to fall, but one group of householders has had a particularly tough winter.

They are the millions of people who use oil for heating.

Most live in rural areas, and have little other choice because of the lack of mains gas.

That can make them vulnerable because although Ofgem regulates the prices of mains gas, no such regime exists for heating oil.

It's a big issue in the region because that applies to large parts of Cumbria, Northumberland, North Yorkshire and County Durham.

Prices in December are thought to have risen by around 50%, with some paying almost double the rates they once did. That is potentially crippling, considering it was one of the coldest winter months on record.

And some people have had problems even getting deliveries. (My parents who live in Cumbria almost fell victim to that at Christmas).

Perhaps it's not surprising then that MPs on all sides have begun asking for action.

The Durham North West Labour MP Pat Glass tabled an early day motion in parliament asking for an investigation into what she sees as anti-competitive behaviour by domestic heating oil suppliers.

Her motion asks why there has been more a steep rise in the cost of domestic heating oil (kerosene) at a time when its price in the commodity markets has only risen by 10%.

And it accuses the companies of exploiting the vulnerable by hiking up prices.

Guy Opperman

The Hexham MP Guy Opperman says some of his constituents are forced to choose between heating and eating.

It's an issue which has also been occupying the Conservative MP for Hexham, Guy Opperman.

He's warned that many households are being forced to choose between "heating and eating" because of rising prices.

And research in his constituency found that competition in his constituency was very limited.

Although it looks as if there are a number of companies to choose from, Mr Opperman found that 10 of them were actually owned by the same parent company - Irish-based DCC Energy.

The Westmorland and Lonsdale Liberal Democrat MP Tim Farron has also called for action to regulate the market to protect his constituents. He also says customers using bottled gas an alternative have faced similar problems,

And the Government seems to be listening.

The Energy Minister Charles Hendry has asked the Office of Fair Trading to investigate the market for domestic heating oil and bottled gas and report back before next winter.

The suppliers have denied profiteering but have welcomed the review.

For the moment of course a review won't necessarily lower the prices on offer to consumers, but as a shot across the bows it might just focus the minds of some of the suppliers.

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