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OFT Helps Off-Mains Consumers Switch LPG Suppliers
11th April 2012
The Office of Fair Trading (OFT) has secured voluntary agreements from the major liquefied petroleum gas (LPG) suppliers to make changes to their domestic bulk customer contracts and improve transparency around switching and cancellation rights.
Avanti Gas Limited, BP Gas, Calor Gas Limited and its sister company Calor Gas Northern Ireland, and Flogas UK Limited and its sister company DCC Energy Limited (trading as Flogas Northern Ireland) have all agreed to make changes. This OFT action follows on from its 2011 Off-Grid Energy Market Study, which identified concerns that some suppliers may not be treating their domestic bulk LPG customers fairly.
Most people with a large supplier-owned LPG tank on their premises, rather than the smaller cylinders, will usually enter into contracts for the supply of domestic bulk LPG. These contracts typically begin with a two year exclusive supply arrangement during which the customer is tied to the supplier. The improvements to the terms and conditions for the supply of LPG and other relevant customer information will mean that customers can better understand how prices can change during this two year period, their switching and cancellation rights, and the associated exit costs.
LPG consumers will be better protected with improved rights to cancel or to switch supplier when prices rise beyond a specified level. Greater transparency in price variation clauses will also allow people a better informed view of the likely cost of a contract.
Where customers are switching to a new LPG supplier they will not bear the costs of the transfer of their tank to the new supplier, nor any direct costs associated with the removal of their tank in order for a new tank to be installed. All the parties have agreed changes to clarify their charges. Some customers may however wish to continue their existing contract with the flexibility to cancel or switch suppliers at any time. Others may wish to commit to a new contract that may remove this flexibility but may also offer improved terms.
Mary Starks, Director in the OFT's Services, Infrastructure and Public Markets Group, said. "150,000 people rely on LPG to heat their homes. They need to know where they stand when they are dealing with suppliers, The changes we have secured will mean customers are better informed of how prices can change and of their cancellation rights."