Over the last few weeks, I have had a number of questions about the ongoing energy and fuel situation in the UK and how it impacts home heating customers. As still a newish person to the industry I thought it would be useful to address some of these questions and provide some straightforward answers.
To date we have been quite fortunate. Historically our UK Members have not employed a very large contingent of non-UK drivers and while we have seen some churn our vacancy rate is still in the manageable category. This is of course subject to overall customer demand and as we go into winter, the weather.
We get our fuel from the same place as everyone else – refineries and import terminals and sometimes rely upon third parties who will also have competing demands and challenges.
There has been very significant coverage of the forecourt position and also gas and electricity prices. It is therefore inevitable that we have seen a spike in demand over the last few weeks as customers think about their own home heating oil requirement. All the distributors are working hard to manage this demand and especially trying to make sure that the customers that are either vulnerable or really need fuel are helped first, but we are seeing increasing delivery times.
It should also be remembered that we sell our products into other non-domestic markets on a year round basis including vital industries such as farming, construction and critical public services.
At this time of the year there is a natural pick up in demand and our advice to customers remains the same:
There is a natural demand increase in Winter and we have to plan ahead. We are currently discussing with Government all eventualities and if we need to how we increase Driver hours in a safe manner.
There are a number of factors that influence price the biggest is the crude oil price – over the last year crude oil has gone up by 86% and this has directly impacted home heating oil prices and as such after a few years of low prices we are seeing prices at 2018 levels. It should be remembered that distributors only hold a certain level of stock at their local depots and have to constantly replenish from the refineries and import terminals and so prices to consumers are very current.
Home heating oil is kerosene which a globally traded commodity and demand for kerosene is high. It’s also used as aviation fuel and so the heating market is competing with that market. Prices are set on the international market.
There are other factors that will influence price – when there are large spikes in demand, distributors will increase their staffing levels and also their driver hours – this will of course add to the cost to customers. It should also be remembered increased fuel prices also impact distributors in terms of transportation costs.
Consumers can find details of all the local UKIFDA distributor members who supply their postcode and then compare prices by visiting https://ukifda.org/find-a-distributor/ UKIFDA Members all follow a Code of Practice and Customer Charter, providing reassurance that the supplier will operate to the highest standards of safety and customer service. Typically, any one post code will have at least 3 local distributors. There are also on-line portals that can be used.
I hope these answers have been of some help – my overall impression of this industry having been in it a few months is how hard everyone works to get fuel to the right customer at the right time. Yes, there are challenges and we have seen them before not least during the pandemic and we will inevitably once again rise to the challenge.
8th October 2021