Shell delays paying domestic energy bill support to customers

SHELL is facing criticism over its role in the cost-of-living crisis after it delayed energy bill support payments to thousands of its customers.

The energy giant’s household supply division says some of its 1.4million customers will have to wait until April to receive payments they were due in October, when bills were almost double the amount they were a year earlier.

Shell Energy Retail blamed administrative processes for the delays, but the Department for Business, Energy and Industrial Strategy (BEIS) said it had ordered the regulator to investigate.

Shell, its FTSE 100 parent company, made profits of $30.5billion in the first three quarters of 2022, helped by soaring gas prices that hit consumers hard.

“The Government has stringent compliance and enforcement measures in place with all suppliers for the Energy Bills Support Scheme (BEIS) and our expectation is that suppliers pass this discount on to customers promptly,” a BEIS spokesman said.

“Suppliers are also held to account by the energy regulator, Ofgem, on all matters relating to their business and service to customers and we have asked them to investigate this matter.”

The Government began subsidising household energy bills in October, to coincide with a sharp rise in the energy bill price cap. Under one of the two main subsidy schemes, it is giving energy suppliers £66-£67 per customer per month to pass on to consumers. Shell Energy Retail received £90,141,141 from the Government in October.

It added the money to customers’ credit balances straight away, effectively amounting to an IOU from Shell to the customer for the amount. However, some did not see a reduction to their direct debit amount that month, so did not get any help as bills rose sharply.

Shell Energy Retail said the delay was due to administrative processes and it had advised Ofgem and BEIS of its plans before the scheme started.

Its spokesman added: “The scheme started on Oct 1 but some customers with early direct debit dates will have had the direct debit process started beforehand, hence they missed the first payment.”

He said the delay affected “a few thousand customers” and stressed the discount would be applied to direct debits in April so “those customers will not miss out on the support”.

“This is probably the case for most suppliers who are applying the discount in the same way, and is the result of the way direct debit payments were initiated ahead of the scheme start point and the speed with which government and suppliers came together to deliver it,” the spokesman added.

However, campaigners said that support was most urgently needed during the winter months when usage was highest.

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “This is outrageous behaviour from one of the biggest profiteers from the energy bills crisis. It will have resulted in their customers cutting back on keeping warm this winter. There’s simply no excuse for this and Ofgem must investigate.”

‘There is no excuse for this. It’s vital households get the support they are entitled to as soon as possible’

Peter Smith, of National Energy Action, said: “With energy customers enduring record high energy prices during the peak months of the heating season, it’s vital households struggling to pay their bills get the support they are entitled to as soon as possible.”

Households’ average annual bills rose from £1,277 to £2,500 in October. When the Government introduced the scheme, it told households: “You’ll get £66 in October and November £67 in December, January, February and March. You’ll get the discount monthly, even if you pay for your energy quarterly or use a payment card.”

Shell’s practice is within government guidance of how the scheme should be administered, Ofgem said. Firms have until June 30 to make those payments they have been unable to make, and adding to credit balances counts as a payment being made.

Shell Energy Retail was bought by Shell in 2018 and is among the survivors of a brutal rout in which 30 of its rivals collapsed after gas prices started climbing in October 2021.

It made a loss of £102.4million in 2021.