Ford Fuels Heating Oil for Homes

Energy Crisis – Government Support

The Government announced plans to provide £100 support for households who are unable to receive support for their heating costs through the Energy Price Guarantee. This is welcome support for heating oil customers at a time when energy prices and the cost of living are so high.

They are yet to announce how eligible customers can claim their £100 support payment, but Ford Fuels will continue to work with UKIFDA and the government and will advise customers of any updates as soon as possible.

The Government has also just announced a number of interventions into the energy market which impact distributors both as suppliers of heating oil and as consumers of energy.

We will be putting out a press as soon as all the details have been gathered.

Below is a brief summary of the government announcement, the full government announcement can be found HERE.

Governments fuel crisis announcement...Heating Oil

The government announced the following:

“The Government will also provide an additional payment of £100 to households across the UK who are not able to receive support for their heating costs through the Energy Price Guarantee. This might be because they live in an area of the UK that is not served by the gas grid and is to compensate for the rising costs of alternative fuels such as heating oil.”

UKIFDA will be engaging strongly with the government over the next few days to iron out these issues.

Governments fuel crisis announcement...Business Energy Costs

This scheme will provide energy bill relief for non-domestic customers in Great Britain. Discounts will be applied to energy usage initially between 1 October 2022 and 31 March 2023. A similar scheme will be established in Northern Ireland, providing a comparable level of support.

The scheme will be available to everyone on a non-domestic contract including:
• Businesses.
• Voluntary sector organisations, such as charities.
• public sector organisations such as schools, hospitals and care homes

who are:
• On existing fixed price contracts that were agreed on or after 1 April 2022.
• Signing new fixed price contracts.
• On deemed / out of contract or variable tariffs.
• On flexible purchase or similar contracts.

The scheme is intended to be of broad application but there may be very limited exclusions, for example businesses that use gas or electricity for the purpose of generating power they are selling back into the grid, such as power stations, pumped hydro or grid-level battery storage.

Non-domestic suppliers and consumers must not profit from the scheme other than for its intended purpose of providing relief on necessary energy bills. Any such activity will result in support being refundable to government and may be liable to further penalties.

The amount your bills will be reduced.

The government will provide a discount on your gas and electricity unit prices. To calculate your discount, the estimated wholesale portion of the unit price you would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter.

For all non-domestic energy users in Great Britain this government supported price has been set at:
• £211 per megawatt hour (MWh) for electricity.
• £75 per MWh for gas.

A comparable rate will be set shortly for Northern Ireland.

For comparison, wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
• £600 per MWh for electricity.
• £180 per MWh for gas.

The designs of the GB scheme and the separate Northern Ireland scheme will be consistent.

Urgent legislation to enable the implementation of the scheme will be introduced in Parliament in October. This will provide government with the powers to establish the scheme, ensure benefits are passed on to consumers and provide for an effective compliance and enforcement regime.

Off-grid Businesses:
If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas.

Further detail on this will be announced shortly.

Governments fuel crisis announcement...Northern Ireland

The Business Secretary also confirmed equivalent support for households in Northern Ireland. The Northern Ireland Energy Price Guarantee will offer households the same level of gas and electricity bill support as the equivalent scheme in Great Britain.

Households in Northern Ireland will also receive a £400 discount on bills through the Northern Ireland Energy Bills Support Scheme (NI EBSS), the same support as is available in Great Britain.

For the Energy Price Guarantee, the scheme will still work through electricity and gas bills. The scheme will provide households in Northern Ireland with equivalent financial support with their electricity and gas bills as for those in Great Britain. Energy suppliers will reduce bills by a unit price reduction of up to 17p/kWh for electricity and 4.2p/kWh for gas, and there is no need to take any action to receive this support.

This will take effect from November, but the Government will ensure households receive support so they will see the same benefit overall as those households in Great Britain backdating support for October bills through bills from November.

Governments fuel crisis announcement...UKIFDA

UKIFDA will be meeting representatives from Treasury and BEIS to understand how they think they can get the fixed payment of £100 to customers and what their plans are for non-domestic customers.

The total payment across the UK for domestic customers could rise to £170m – UKIFDA are very aware that any scheme should not impact distributor’s cashflow and that decisions need to be made in order for customers to start buying for winter. The big issue which the government are beginning to realise is because of the structure of the market, customers do not have one-on-one relationships with distributors as they do with gas and electricity suppliers.

Commenting on the announcement, UKIFDA CEO Ken Cronin said:
“We wholeheartedly welcome the need to support heating oil customers at this difficult time. A number of UKIFDA members have received calls today from their customers requesting further detail about the mechanism to receive these payments.”

UKIFDA CEO Ken Cronin continues:
“UKIFDA will be actively engaging with the government and our members over the next few days to iron out these practicalities and ensure a proper working mechanism is put in place. One that ensures oil households receive their payments swiftly and easily without putting an expensive and burdensome administrative process upon the oil distributors.”

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