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Fuel poverty has been a recurring topic of discussion over the last few years due to the inexorable rise in energy bills in the UK. One area that doesn’t get quite as much coverage is the impact of fuel poverty in rural areas where there is no mains gas supply. In this scenario, householders are often given no choice but to heat their homes with heating oil.
“I’m currently on benefits and the cost of heating oil in this house is more than my income so I’ve had no heating or hot water for 2 months. I am not eligible for any Government winter/fuel-related help and can’t insulate better because I’m renting and the building is listed so can’t double glaze. “ – Posted by Simon on 2nd January 2013.
“I live in Knaresborough and this road is still not on gas mains. My last oil delivery cost me £330 and in my rented house (Landlord refusing to service the boiler) it has lasted me 35 days with the heating on for 4 hours in total set on 15 degrees. I cannot afford to get any more for Christmas and my two children are both disabled. Merry Christmas!!!!!” – Posted by Nichola Lewis on 19th November 2012.
Mark Askew, Chief Executive of FPS, the trade association for the oil distribution industry also explained another reason that heating oil customers in rural areas suffer from fuel poverty is because the cost of delivering heating oil has also risen. Heating oil distributors have been subject to similar, if not greater, rises in diesel fuel for their vehicles in recent years. As a result, delivering to rural communities that may be further from the supplier is more expensive. It also makes the delivery of lower volumes less cost effective and, in both cases, prices per litre to rural households have to rise.
One other factor that impacts on heating oil users is the need to pay for their fuel up front. Unlike gas and electricity customers who can pay a flat rate monthly fee by direct debit, in general, heating oil users have to spend a large sum of money all in one go. The minimum order quantity across the UK is usually 500 litres so, if you take an average price of 60 pence per litre, you’re looking at an outlay of £300 + VAT at 5%. That can be a big hit to a monthly income. BoilerJuice does offer a monthly payment plan try and help heating oil customers spread the load by allowing them to pay into the plan monthly and then draw on these funds when they need to order their oil.
How will recent proposals by politicians help heating oil users in fuel poverty?
The simple answer appears to be not very much. While Ed Miliband did state at this years’ Labour party conference that he would look to impose a 20 month freeze on gas and electricity bills if Labour won the next general election, there was no mention of heating oil. However, when challenged on this later, the Labour party did state that they would also look into applying some sort of controls to heating oil as well. How this would work is yet to be explained.
The coalition government is currently grappling with the idea of cutting green levies on energy bills. Again, this will have no impact on heating oil prices as heating oil suppliers are not subject to the same energy efficiency and green levies that the big six are accusing of causing some of the rises in gas and electricity bills.
What help is available to heating oil users to help combat fuel poverty?
There are a number of initiatives to help combat fuel poverty that are open to heating oil users. These include direct payments such as:
The Warm Homes Discount Scheme – a scheme offered by energy suppliers that has strict eligibility criteria that varies from supplier to supplier. If you qualify, the scheme offers a £135 discount on electricity bills.
Winter Fuel Payment – this is a government scheme for pensioners that offers between £100 and £300 tax free per year to help with heating bills. The amount you receive does depend on your age and other occupants of your household.
Cold Weather Payments – a government scheme aimed at people on certain benefits that offers payments when the local temperature is or is forecast to be below zero degrees Celsius or below for 7 or more consecutive days. The payment is £25 (2013/2014) per 7 day period and is available between 1st November and 31st March.
Local authority help – some local authorities may have further financial grants available to low income households struggling to pay energy bills so it is worth contacting the local council to find out what is available.
What can be done to reduce fuel poverty for heating oil users in rural areas?
There is no real prospect that energy bills, whether for heating oil or gas and electricity are going to decrease significantly in the future. Whilst heating oil prices have been surprisingly low this autumn due to increasing oil production in the US, recent attempts to broker peace in Syria and improving relations between the US and Iran, the general consensus is that prices will rise in the winter when demand for heating oil is higher. This means householders have to look at what they can do to reduce energy bills including:
Given the poor energy efficiency of houses in rural areas, energy efficiency improvements in the household should not be ignored. Despite more rural homes having solid wall construction which precludes the use of cavity wall insulation there are other internal and external solid wall insulation systems that can be used and there may be grants or funding for this. Additionally, other energy saving measures such as loft insulation and replacement boilers may also be covered by schemes such as The Green Deal, The Energy Company Obligation or local council funded schemes. The Energy Saving Trust has full details of schemes available and eligibility criteria. These are worth exploring as, according to The Energy Saving Trust, replacing an old inefficient boiler could save a household around £300 per year on fuel bills.