High UK price of gas

[Guest Bill]

The following aoppeared in the Daily Telegraph: Homes that are not connected to the national gas grid, but choose to buy gas in cylinders or tanks are paying more than twice as much for the privilege, the Competition Commission said yesterday. The commission said there was "weak competition" in the domestic liquefied petroleum gas (LPG) market, which is dominated by four companies. Calor, BP, Shell and Flogas supply 90pc of homes. Calor has half the market, which is worth around £120m a year. LPG is used by some 150,000 UK homes, mostly in rural areas. It is also used in patio heaters and barbecues. The commission said competition-stifling practices have resulted in an average bill of £800 a year for LPG households. The annual mains gas bill is £390, according to Ofgem, the energy regulator. There is also a large disparity in the prices between the four companies. "We have provisionally concluded that competition is not working as effectively as it should and that consumers are losing out as a result," said Peter Freeman, chairman of the commission's inquiry group. "Customers face a number of hurdles in obtaining a quote from another supplier, let alone the best deal, and it is necessary to change tanks when a customer switches supplier." Tanks and cylinders from different companies have different valves, effectively tying customers to the same supplier. Household storage tanks have to be changed if a household decides to change its supplier, and the cost is passed on to the customer. The commission said it would now consider how to remedy the situation, but suggested the process for switching between suppliers could be standardised. Shell is in the process of selling its worldwide LPG arm. Several private equity houses have been lining up a deal for the unit. Britain's LPG Association pledged its co-operation with the ongoing consultation. ### The newspaper's comment was: Message in a gas bottle You probably never wondered, as you struggled to interpret those incomprehensible instructions for changing the gas cylinder on the caravan, boat or out-of-the-way cottage cooker, whether there was an alternative to wherever-it-was they sold the refills. You just paid what the man asked, and if Shell gas was cheaper than Calor, then tough, because you knew (or would quickly find out) that you couldn't attach its bottle to the Calor gas tap. So you'll be pleased to hear that the authorities have been worrying about this on your behalf. In July last year the Office of Fair Trading sent the problem to the Competition Commission, and yesterday it came up with some preliminary findings. Just 14 months and an Emerging Thinking (sic) document later, they have noticed that each valve on the tap is a proprietary design and will fit only that supplier's gas bottles. This is, of course, anti-competitive. You do not need to be a conspiracy theorist to deduce that it's also deliberate. Most users have better things to do than to find an engineer to change the valve (or even, for those with serious fixed tanks, the entire set-up) so they just pay. It's worth noting, in passing, that had the suppliers all got together and agreed on a standard design, the competition authorities might have had a go at them for collusion, so you can hardly blame them. It's easy to describe the problem, and rather more difficult to fix. It does seem silly that those big fixed tanks are usually removed when the customer switches supplier, replaced by an almost identical model, but transferring ownership of existing tanks might raise safety issues, since they are not only shaped like bombs. The commission wants the suppliers in this £120m industry to be more customer-friendly with its contracts, switching processes and information. It all seems fair enough, and if the suppliers disagree, the commission has ways of changing their minds…

[Guest David Powell]

That is why refillable bottles are becoming so popular...bottled LPG about £1.33P per litre...fill it yourself at Morrisons forecourt 29.9P per litre...I beleive the average fill your own is between 33P and 36P per litre. I am looking into underslung tanks for domestic and the engine. It will cost a thousand plus including computer management but at least I won't be getting ripped off any more.

[Guest Clive]

I just wish our local Morrisons sold LPG, but they don,t. Our local is Shell/Calor and 40.9p/litre. Still nearly a third of the show price for bottled Calor and less than half from the cheapest local outlet. We have oil central heating. Our last refil was over £600.00 and this will not last a year in our three (small) bedroom bungallow! Someone was telling me that oil was still competitive with natural gas which had also gone up recently.?? I just wish our domestic heating bill was £300ish! Oh yes, I fitted gas tank to our Motorhome some while back. Propper job under the floor with a real fuel gague and remote low technology but accurate display in the motorhome. Not a couple of expensive converted re-fillable bottles and change over system standing in the gas locker! This way we have a spare locker and no change over system to worry about. Plus we always know exactly how much gas we have! I got the bits from MTH Autogas who were very helpfull. Clive (in waffle mode)

[Guest David Powell]

Yes, Had a long talk with MTH Autogas at Malvern. It was very educational, with no 'bull', and his engine conversion was the cheapest quote ever, but I have an idea it may not be a computer managed system.

[Guest Mel E]

Sadly, I'm old enough to remember the last time LPG became popular for powering vehicles. It became quite widely available and then died almost overnight. The reason? The CofE put up the excise duty and killed its advantage. If it's any consolation, LPG at garages is cheaper in the UK than in France - byt quite a margin!