Petition launched for heating oil price cap as costs rocket on Shotley peninsula

By Derek Davis

5th Feb 2022 | Local News

A petition has been launched calling on the government to provide a price cap for heating on with costs rocketing on the Shotley peninsula.

While gas and electricity is capped by Ofgem, domestic heating oil is not.

As there is no gas provision on the peninsula the vast majority of residents use oil for their heating, along with electricity.

The petition, which runs until April, asks for the removal of the the current 5% VAT levy on domestic fuel, and provide some sort of price protection for domestic heating oil, which, unlike electricity and gas, is not price capped.

It goes on to say: "During the Brexit leave campaign it was implied that the VAT on domestic fuel would be removed once we had left the EU, this has not yet happened.

"With respect to domestic oil, the price has doubled within the past year, similar rises with electricity and gas prices have been capped, protecting the consumer.

"Similar protection is needed for domestic oil consumers."

Toby Simmons from Holbrook contacted Nub News to say: "Please could you spread the word on this.

"Fuel prices are going through the roof for everyone but it is getting even worse for all of us that use heating oil and we are not protected at all. My bill has more than doubled already and while I'm glad I filled up when I did, but I know others that don't do that and are being hit harder.

"Of course, by the time I do need to refill, prices could be astronomically expensive and there is no cap on what suppliers can charge.

"I'm not saying they will, but we need the same protection as gas users have."

Record increase in global gas prices has seen the energy price cap rise of 54%

The energy price cap will increase from 1 April for approximately 22 million customers.

Those on default tariffs paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year (difference due to rounding). Prepayment customers will see an increase of £708 from £1,309 to £2,017.

The increase is driven by a record rise in global gas prices over the past six months, with wholesale prices quadrupling in the last year.

It will affect default tariff customers who haven't switched to a fixed deal and those who remain with their new supplier after their previous supplier exited the market.

The price cap is updated twice a year and tracks wholesale energy and other costs.

It stops energy companies from making excessive profits, ensuring customers pay no more than a fair price for their energy.

The price cap allows energy companies to pass on all reasonable costs to customers, including increases in the cost of buying gas.

Since the price cap was last updated in August, the current level does not reflect the unprecedented record rise in gas prices which has since taken place.

Under the price cap mechanism, energy companies will be allowed to pass on these higher costs from April when the new level takes effect.

This is because energy companies cannot afford to supply electricity and gas to their customers for less than they have paid for it.

Over the last year, 29 energy companies have exited the market or been put in special administration in the wake of soaring global gas prices, affecting around 4.3 million domestic customers.

Jonathan Brearley, chief executive of Ofgem, said: "We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.

"The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem's role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.

"Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy which will help protect customers from similar price shocks in the future."

If customers are struggling to pay for energy bills, they should contact their energy supplier as soon as possible. Depending on their circumstances, customers may be eligible for extra help with their energy bills or services, such as debt repayment plans, payment breaks, emergency credit for prepayment metered customers, priority support and schemes like the Winter Fuel Payment or Warm Home Discount rebate.

Warm Home Discount – An annual £140 discount for some people getting Pension Credit or in low-income households

Household Support Fund – One off funding available through your local council to help vulnerable households this winter

Winter Fuel Payment – An annual £100 to £300 fuel payment for people born on or before 26 September 1955

Cold Weather Payment – A £25 payment for every 7 days of very cold weather between November and March

Fuel Direct Scheme – Can help you repay a debt from your benefits

For more details tap below

https://www.ofgem.gov.uk/getting-help-if-you-cant-afford-your-energy-bills Breathing Space Scheme: This is a scheme to give households time to receive debt advice and find a solution to sort out their debt problems. Breathing space will last for 60 days as long as applicants remain eligible during which time all creditors who have been included will be informed and must stop any collection or enforcement activity. Once the breathing space ends, creditors will be able to collect the debt in the usual way. Call the National Debtline on Freephone 0808 808 4000 or visit www.nationaldebtline.org The Citizens Advice consumer service can provide advice on how customers can resolve problems with their energy provider. You can contact Citizens Advice via webchat, or by calling 0808 223 1133. For complex or urgent cases, or if a person is in a vulnerable situation, they may then be referred onto the Extra Help Unit.
  • How much are you paying, and who is the cheapest supplier for you on the peninsula? Contact the editor: [email protected]

     

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