Angus B MacNeil MP has written to the UK Government about a Federation of Petroleum Suppliers (FPS) briefing which insisted that 500 litres was the minimum delivery of heating oil from road tankers.
The issue arose after constituents worried that they would be unable to afford the minimum delivery of 500 litres contacted Mr MacNeil. Now the islands’ MP says the responsible minister has clarified the situation and said that the FPS is wrong.
Mr MacNeil said: “I wrote to the UK Government regarding the FPS briefing note which states that 500 litres is the minimum volume of oil “that can legally be delivered by road tanker”. With the average price of heating oil in the region of 71p per litre, people are being asked to spend over £300. This is a huge expense especially for pensioners and those on low incomes.
“Among my concerns is that with the minimum delivery policy of 500 litres, pensioners will be put off from buying heating oil and find themselves in a situation where they have to choose between heating or eating”.”
He said David Willetts, the UK minister for Universities and Science, states very clearly in his response that the FPS briefing note as a general statement is incorrect.
“The minister highlights that there are no specific legal requirements for the minimum delivery of a road tanker to be 500 litres. In fact, he points out that the Measuring Instruments (Liquid Fuel delivered from Road Tankers) Regulations 2006 permits the delivery of quantities down to 100 litres.”
He said it was good news for all islanders – especially for pensioners and those on low incomes.
He said: “I have received assurances from the Minister that officials from his department will be contacting the FPS to inform them of the inaccuracy of their briefing note. I will contact FPS and the oil companies delivering to Na h-Eileanan an Iar in order to ask them to look again at their minimum delivery policy. With the winter approaching, they should be more understanding to the financial pressures on households and particularly our pensioners.”
With the gritting season almost upon us, would`nt it be only correct that Na h Eileanan Siar should fill up with the cheaper fuel outlet that has now become available to all.
OLIGOPOLY
See link
http://www.cliffsnotes.com/study_guide/Cartel-Theory-of-Oligopoly.topicArticleId-9789,articleId-9779.html
Cartel Theory of Oligopoly
A cartel is defined as a group of firms that gets together to make output and price decisions. The conditions that give rise to an oligopolistic market are also conducive to the formation of a cartel; in particular, cartels tend to arise in markets where there are few firms and each firm has a significant share of the market. In the U.S., cartels are illegal; however, internationally, there are no restrictions on cartel formation. The organization of petroleum-exporting countries (OPEC) is perhaps the best-known example of an international cartel; OPEC members meet regularly to decide how much oil each member of the cartel will be allowed to produce.
Given how long it takes a tanker to make a delivery, and how much it costs for that tanker to make a delivery I very much doubt that people would want to pay the price per litre to make a sub-500 litre heating oil delivery commercially viable. The heating oil suppliers are at the mercy of the cartels as much as anyone else-they operate on small profit margins and have to buy from the refineries at the prices the refineries charge.
If you want to target someone to get the prices down, try aiming for the crude oil speculators that drive prices up.