UK suppliers of off-grid heating oil and gas suspected of price fixing

Claims that fuel companies profiteered from last month’s freezing weather by inflating the price of heating oil are to be investigated, the UK Government announced last week.

Charles Hendry, a Government minister said he was worried about the “fact that quite a number of suppliers are owned by one individual company…there has been a massive increase in prices.”

More than 1.5m homes are dependent on oil and 150,000 need deliveries of liquefied petroleum gas (LPG) for their heating, cooking and hot water.

Customers reported prices jumping from 45p a litre to 72p this winter.

This is despite only a 10pc rise in the wholesale price and a 17pc rise in the price of crude during the coldest winter in a generation.

Some rural consumers were left waiting for deliveries for weeks during bad weather, when demand doubled.

The biggest supplier of heating oil is DCC Energy, an Irish company that also owns price comparison sites, including BoilerJuice. It has a quarter of the national market for domestic heating oil after buying up a series of regional companies and it now operates under more than 10 brands.

An official company presentation for its GB Oils subsidiary shows that 16pc of the company’s business comes from the domestic – rather than commercial – market but it makes 34pc of its margin in this area, proving that it has ramped up its profit margin.

Other major players in the heating oil market are NWF Fuels, marketed under 14 brands, Pace Fuelcare and WCF Fuels.

The liquefied gas market, which is dominated by Calor, BP and Flogas, has been the subject of several competition inquiries in the past.

Paul Blacklock, head of strategy for Calor, a supplier of off-grid gas, said he was “disappointed” that gas had been dragged into calls for an investigation

The increase in costs is ten times that endured by gas customers and is estimated to have added as much as £540 to annual heating bills.

Fuel companies denied they were profiteering and blamed the increase on the rising oil prices and delivery costs as drivers struggled to get through the snow and ice.

The highest proportion of homes without mains gas is in Northern Ireland where 500,000 properties – or 68 per cent of the population – are not on the gas grid. In England, around 820,000 homes rely on heating oil. In Wales the figure is 143,000 while in Scotland it is 155,000.