The heating-oil crisis exposing more than a million families to price spikes and shortages last winter may be even worse this year, according to the UK’s largest supplier.
By Rowena Mason
8:15PM BST 23 Oct 2011
During the chaos, the Government had to intervene with emergency measures to deal with blockages, as the snow hampered deliveries. Prices also shot up by around 70pc, amid a rush for heating oil needed to keep many rural households warm. Ministers considered rationing and urged people not to hoard stockpiles of the fuel.
However, experts are warning that the situation is likely to arise again, as households are still not buying enough heating oil in advance when prices are lower. Last year, there was a 40pc increase in demand during the cold snap, pushing up prices. But hard-pressed families appear to be putting off their purchases until the last minute, as finances are under more pressure. Adding to the risk, the Met Office has forecast a high risk of a colder winter.
Donal Murphy, managing director of DCC Energy, said purchases are even more delayed this year and the economy could be one reason why.
He said: “It absolutely will happen again if people don’t start buying product now. Customers typically wait until the weather turns very cold before ordering. The best time for consumers to buy their product is in the summer, when prices are cheaper.”
DCC Energy, which owns GB Oils, was among the suppliers accused of taking advantage of the cold weather to raise prices, but the Office of Fair Trading this month cleared the market of uncompetitive practices. About 97pc of off-grid households live in an area served by at least four suppliers. The OFT did, however, say that it was still looking at differences between prices quoted and prices on delivery.
Mr Murphy said: “People talk about profiteering, but this is probably a perfect market – pricing reflects supply and demand.”