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Fuel Oil

Volume 506: debated on Wednesday 3 March 2010

To ask the Secretary of State for Energy and Climate Change (1) what recent representations he has received on the delay in the delivery of domestic heating oil to consumers; and if he will introduce measures to bring the regulation of domestic heating oil providers within the remit of Ofgem; (319707)

(2) what assessment he has made of the delay in the delivery of domestic heating oil as a consequence of the Christmas and new year holidays and of the snow in January and February 2010.

Demand for heating oil increases in cold weather. Oil distributors worked hard in challenging conditions, particularly in more remote parts of the country, to supply customers during the worst cold weather experienced for 29 years. DECC officials received representations from the Federation of Petroleum Suppliers (FPS) that heating oil distributors were facing increases in demand—at higher rates than they could make deliveries in large part as a result of the difficulties of access to properties due to ice and snow. DECC officials worked closely with FPS so that the enforcement of drivers’ hours rules could be temporarily relaxed to enable deliveries to be made to customers as conditions improved.

With regard to the question of Ofgem, the Government do not believe that bringing these fuels under regulations having similar scope to the Gas and Electricity Acts would be an appropriate and proportionate form of regulation. These Acts deal with markets where there are natural monopolies which mean that competition cannot be expected on its own to protect consumers from the risk of exploitation. In contrast, there is no natural monopoly in the distribution of heating oil. In the UK there are around 200 different fuel distributors each with a national, regional or local presence, with competition between the companies involved. Overall, the Government support the retention of a competitive market for heating oil, believing this to be in the best interests of all customers. Both general consumer protection legislation, such as the Sale of Goods Act and Unfair Terms in Consumer Contracts Regulations, and competition law apply to this sector.