OFT boosts transparency on heating oil prices

64/12 26 July 2012

Following OFT action, GB Oils Limited, the largest supplier of heating oil in the country, has changed its domestic heating oil contracts ensuring quoted prices do not increase from the time an order is made until the customer is billed on delivery.

When a consumer orders from a supplier, 'spot' prices are quoted that reflect the current market price of oil. The OFT has today secured legally binding undertakings from GB Oils to change its terms and conditions ensuring prices quoted at order remain fixed until delivery.

This OFT action follows on from its 2011 Off-Grid Energy Market Study, which identified concerns that some suppliers may not be treating their customers fairly.

Mary Starks, Senior Director in the OFT's Services, Infrastructure and Public Markets Group, said:

'Customers need to know where they stand when they are dealing with suppliers. The action we have taken will allow consumers to buy with confidence even during periods when the weather is snowy and prices are changing rapidly.

'The changes the OFT has secured from GB Oils will remove the uncertainty over what customers will actually end up paying.

'This adds to a body of enforcement work the OFT has undertaken to ensure that users of off-grid energy are treated fairly by suppliers.'

Other action the OFT has taken in this sector includes securing voluntary changes to the content of misleading websites and voluntary agreements from the major liquefied petroleum gas (LPG) suppliers to improve transparency around switching and cancellation rights.

NOTES

See the case summary in respect of this investigation.
GB Oils is a subsidiary of DCC PLC, a sales, marketing, distribution and business support services company, operating across five divisions, including energy.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) contains a general prohibition against unfair commercial practices and, in particular prohibitions against misleading actions, misleading omissions and aggressive commercial practices. The Regulations are enforceable through the civil and criminal courts.
The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) apply to standard contract terms with consumers and protect consumers against unfair standard terms in contracts they make with traders. The OFT can take legal action to prevent the use of potentially unfair terms. A term is likely to be considered unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. A consumer is not bound by a standard term in a contract with a trader if that term is unfair. Ultimately, only a court can decide whether a term is unfair. The undertakings in this case relate to both UTCCRs and CPRs.
GB Oils co-operated with the OFT's investigation.
See further details about the market study into the off-grid energy sector.

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