HIGH COST OF LPG
Rural households see gas costs double and month-long delivery delays
GREEDY gas suppliers are exploiting many rural households, doubling fuel prices and leaving some without heating for six weeks because of long delays in deliveries. Up to a million properties rely on liquid petroleum gas (LPG) for their heating as they are unable to hook up to the national gas grid. Lorries deliver the gas to put in home tanks.
Customers feel held to ransom by the three major national providers – Calor Gas, AvantiGas and Flogas – which are eager to force households into two-year delivery contracts. These contracts cannot normally be broken but allow the supplier to ramp up prices.
This year prices have soared more than two-fold in some cases to more than 70p a litre as suppliers have been able to exploit rising demand due to a late cold snap in the weather.
Adding to the financial pain, many homes have had to wait a month or more for deliveries – leaving thousands with no heating or fuel for cooking hot meals. Suppliers blame gas pipeline cracks and the closure of refineries for maintenance work for the long delivery delays.
Jon Rose, founder of independent gas comparison service lpgcompare.co.uk, says: ‘These giants act like criminals in a cartel. Customers are exploited with excessive prices they are unable to escape from. Someone paying 70p a litre right now can get exactly the same gas for 35p or less.’
Customers often do not realise it is possible to switch when their two-year contract comes to an end – believing the logo on the side of a gas container in the garden means it is this firm that must be used to supply the home with fuel.
Rose says: ‘If you accept a more competitive offer then the new supplier takes over the tank.’
The average three-bedroom home might use 2,500 litres of gas per annum – meaning a switch could save a household as much as £900 a year. He adds: ‘Often you will get a fixed fuel price for the first year but after that gas charges can rocket because the supplier knows you cannot escape.’
Services such as lpgcompare.co.uk can help you find a new supplier – and will haggle on your behalf. This could be one of the big three or a regional provider such as LP Gas Wales Direct, Extra Fuel or Countrywide LPG. John Harrison, 63, and wife Val, 64, from Clogwyn Melyn in North Wales, signed up to Calor Gas when they moved to a threebedroom bungalow in 2010. But as prices rose they became increasingly unhappy.
John, an author and website designer, says: ‘Three years ago I was offered a £100 reward for sticking with Calor Gas. Hang on, I thought – if it is willing to be so generous there must be competition out there worth checking out.
‘So I called Flogas – and they almost halved the quote Calor Gas had given me. But when I informed Calor Gas I was quitting it agreed to match Flogas’s price.’
John stood firm until Calor Gas came back again with a £250 refund if he agreed to sign for two more years.
John, author of book Low Cost Living, adds: ‘Now when a two-year deal comes to an end I simply call competitors and go with who can offer the best price after telling them about other deals that are on the table. ‘There is no hard-nosed haggling – I just say I will go elsewhere. By switching I have saved £1,000 over two years.’
The couple ran out of gas at the start of the year – despite an automatic call to the fuel supplier from a sensor attached to his gas tank. When John called to explain his wife needed heating as she suffers from a lung condition, the supplier Calor Gas was quick to respond – and came the next day.
Not all gas customers have been so fortunate. A bottle neck in supply has been caused by a combination of factors. These include a rise in demand, a broken North Sea gas pipeline and refineries closed for maintenance work including Stanlow in Cheshire and Valero in Pembrokeshire.
Some customers have been left waiting up to six weeks for deliveries – during which time many ran out of gas. The delays began in January and are still being experienced.
Bulk orders can lower costs but when an order is made makes little difference – unlike other fuels such as oil. Those ordering in low demand times such as summer should at least not suffer long delays. Rose also says that some homeowners struggle to escape the clutches of a rip-off deal after their two-year contract is over due to the gas tank being within three metres of a building or tree.
According to ‘code of conduct’ rules it means a competitor may not be willing to take the deal on, so you are effectively tied to the existing supplier. But this should not stop customers trawling the market for a better price and demanding to pay a lower tariff.
The Competition Commission made a ruling in 2009 stating that suppliers are obliged to transfer storage tank ownership to a new provider when they switch – usually after at least two years.
The commission, which was renamed the Competition and Markets Authority in 2014, also demanded that suppliers make it more clear to customers they can switch after the end of their twoyear lock-in period.
A spokesperson for the industry trade body UKLPG says: ‘The LPG market in Britain is highly competitive with more than 30 companies supplying gas. Consumers looking for a supplier can use the postcode search service on our website to find regional and national companies serving their area.’