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Heating oil explained

Heating oil investigation findings

By Liz Ransome-Croker

Article 5 of 5

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Heating oil investigation findings

Find out what Which? and the Office of Fair Trading discovered when heating oil companies and prices were investigated for fairness.

Many Which? members have told us they are concerned about heating oil prices, a lack of transparency and competition in the market, and theft.

The winter of 2010 saw a particularly sharp spike in heating oil prices. Prices went up by more than 70% - from around 41p a litre in September 2010 to 73p a litre in December 2010. Which? shared its members' concerns with the Office of Fair Trading (OFT).

The OFT looked into the problem as part of a larger investigation into the off-grid energy market. It looked at price rises, how well competition provides choice for consumers and whether suppliers' terms and conditions were fair and clear.

To help get the most for your money, read our guide to heating oil prices.

Heating oil market ruled fair

The OFT concluded in October 2011 that the heating oil and LPG market works well. It reported that the price spike in winter 2010 was due to sudden increased demand because of the bad weather.

Which? energy expert Sylvia Baron said: 'How can a 70% price increase not be seen as a problem? With the OFT taking no action, there seems to be little in place to protect off-grid consumers from another price spike.'

According to the OFT, the gradual increase in prices was primarily down to the price of crude oil, which heating oil is refined from. Prices are generally higher in winter and lower in summer, so this is the best time to buy the bulk of your supply. 

In terms of heating oil market competition, the OFT found that 97% of people in rural areas who rely on heating oil have access to at least four suppliers, with the largest company accounting for less than a fifth of the market.

In addition, the OFT ruled that profit margins have not been excessive and prices have been constrained. 

Every year we conduct dozens of investigations into the issues that matter to you. To find out more about our findings and to tell us what you're worried about, join Which? and help us make a difference with our investigations and campaigns. We don't take advertising, so we're independent and can say what we believe in.

Heating oil price comparison sites

The OFT did have some concerns regarding the transparency of some websites offering consumers the chance to find the best price for heating oil. Some were unclear about whether it was a price comparison site, or one for ordering heating oil directly from one supplier. 

WCF Fuels, which runs the site fuelfighter.co.uk, claimed to make price comparisons, but instead quoted prices for its own products and services.

Boilerjuice.co.uk, owned by Boiler Juice Limited, which is a comparison site offering quotes from GB Oils Limited and other heating oil suppliers, was not transparent about its links with DCC plc, which owns GB Oils Limited.

According to the OFT, the companies mentioned have co-operated with the OFT and made changes to their sites accordingly.

In July 2012, the OFT took action against GB Oils Limited after it changed the price of its heating oil from the time is was quoted to the time of delivery. This saw GB Oils Limited change its terms and conditions so that prices quoted would remain the same when delivered.

If your supplier makes a mistake or tries to change the agreed price, you can take action against them. To find out more about your legal rights, see our straightforward guide to the Consumer Rights Act.