The OFT has published findings in its study into the supply of off-grid energy (four million households are supplied by off-grid energy). We reported on the opening of the market study in our January 2011 and March 2011 bulletins. The OFT has concluded that the off-grid energy sector does not need price regulation and that consumers have a good choice of suppliers.
The OFT found that although there was a price spike last winter due to demand and bad weather, profit margins were not excessive and overall, competition acted to constrain prices over the year. The OFT also noted that the increasing price trends are largely driven by the internationally traded prices of oil and liquefied petroleum gas (LPG).
The OFT does have concerns that consumer law is not being complied with, particularly on pricing practices and the treatment of customers. Areas of particular concern are the difference in prices charged between placing the order and delivery, the locking of customers into LPG contracts that are overly expensive following expiry of special introductory rates, and the potential mis-selling of solar panels.
The OFT recommends that the heating oil industry strengthen its codes of practice in relation to consumer protection. The OFT does not propose to make a market investigation reference to the CC but it is continuing to look into the potentially unfair consumer pricing practices.