Industry Responds To Daily Mail's Heating Oil Price Hike Predictions
20th October 2011
OFTEC and the Federation of Petroleum Suppliers have responded to predictions contained within a Daily Mail article, that oil prices could break the £1 per litre barrier over the coming months.
The Daily Mail article published during the weekend, predicted a major spike in home heating oil prices amidst predictions of another bitter British winter.
However, speaking to OilFiredUp.com, Jeremy Hawksley, Director General of the Oil Firing Technical Association (OFTEC) claimed predictions of heating oil prices breaking through the £1 per litre barrier as 'unecessarily alarmist'.
"The article is unnecessarily alarmist, and doesn't paint a true picture of what happened with oil supply in December and January when some parts of the country experienced very harsh weather. In some remote rural locations, oil suppliers struggled to deliver in wintry conditions where some properties were inaccessible. The media reported that a handful of people could not get their oil deliveries, and because of the hype people were panicked into placing orders for oil they simply did not need. As a result the price of oil rose to between 70-75p per litre, which reflected the increase in demand coupled with the extra delivery costs of dealing with snow and icy conditions.
"OFTEC advises customers to be prepared and to fill up their tanks before winter when the price of oil is traditionally cheaper. That way they will be prepared, and will also have their own fuel supply if they are cut off by bad weather.", said Jeremy.
OFTEC's appeal to customers to fill up their tanks was echoed by Mark Askew, Chief Executive of the Federation of Petroleum Suppliers. Mark told OilFiredUp.com, "We must emphasise that customers need to think about ordering early each year before the bad weather hits. Suppliers are usually less busy in this period and able to offer better value than in the peak periods of December, January and February. Many people did not heed this advice last winter and experienced problems in getting heating oil on time. Our members are currently reminding customers that they should order early, but people have got into a pattern of ordering the minimum quantity. Customers last year had a trend of ordering 500 litres and then ran out in the middle of the worst snow, when tanker drivers just couldn't get to them. We are trying to educate people to think ahead and be prepared.
In winter, the UK can also experience shortages of heating oil at terminals. Demand is obviously governed by the weather and a prolonged cold snap, such as was experienced last winter, means that the terminals are unable to provide product quickly enough and consumers can run out whilst waiting for deliveries as distributors have to go further afield to get supplies."
The FPS, Citizens Advice Bureau, ACRE, Consumer Focus Wales and Consumer Focus Scotland together with DECC launched a buy oil early campaign in September.
OilFiredUp.com Editor John Switzer says, "Speaking to heating oil distributors earlier this week, the picture of doom and gloom painted by the Daily Mail, is not one that they recognise.
"Memories of last Winter remain fresh in the mind of heating oil consumers and feedback from distributors suggests many consumers are heeding the advice issued by OFTEC and the FPS to fill up their tanks early. Additionally, there have been some considerable investments by distributors in additional storage and delivery capacity since last Winter and this year, the heating oil distribution industry is better prepared than ever before for the worst excesses of the British winter. That said, consumers have a responsibility to managed their heating oil stocks and make allowances for extended delivery times that may result from treacherous driving conditions.
"Unlike some industry experts and national newspapers, I don't have a crystal ball and can predict neither the weather, nor forward heating oil prices. But I am struggling to identify a set of circumstances in the months ahead that could cause increase current typical heating oil prices to increase by around 75% and break the £1 per litre barrier."
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Article Last Updated 20th October 2011