Interview

Oil clubs, drums, kero pumps and NIOF distributors

“We have to be careful that consumers are given the correct information,” said David Blevings, spokesman for the Northern Ireland Oil Federation (NIOF), in response to the launch of the Crumlin Oil Club
Unrealistic savings
“The club’s publication refers to some GB schemes saving participants between three and 6ppl; this maybe the case in GB, but with a highly competitive local market in Northern Ireland, where 275 distributors supply around 500,000 homes, these savings are frankly not realistic. Reviewing the Fuel Oil News Price Totem the actual distributor margin in Northern Ireland is somewhere between 2 and 4ppl – the saving’s just not there.
“Many oil clubs are making comparisons based on the £1 plus per litre for a 20-litre oil drum, which includes the drum’s cost. Consumers have moved past buying drums; most households will have procured two or three drums which they use to fill up at the forecourt kerosene pump. Over the last two years, the biggest growth in kerosene has been at the pump; in rural areas the majority of retail sites now sport one.
 
For emergency use only
“The growth in the drum business is a concern; there are clear health & safety issues when carrying kerosene in cars, and there’s potential for environmental contamination from drips/spillages as it’s poured into the household tank.
“Small oil drums are for emergency use only. They should provide a small amount of oil – often in an out of hours run out situation – allowing the householder to heat their home until a distributor can visit the next day. They’re not promoted as a method for heating a family home and we continue to discourage consumers from using them, except in an emergency.
“We’re convinced that the future for oil consumers is a viable pay as you go system similar to that operated for gas and electricity. Along with OFTEC we continue to lobby minister McCausland to introduce the new technology that has already been developed locally by Kingspan and Carillion.
 
Prepare ahead for winter – ensure your customers know what payment terms you offer
“In this difficult economic period, NIOF is only too aware of the impact increased energy costs have on consumers. We’re not against oil clubs per se, but consumers should be given the correct information on potential savings.
“As a responsible industry, numerous products are already offered to help consumers budget for annual fuel requirements. Putting money aside each week into a budget payment scheme such as PayPoint and Council stamp schemes, can deliver all oil requirements over the winter period. Most distributors will accept direct debits and many operate their own savings schemes. These schemes are ideal as the consumer can build up credit and/or budget to buy a more economical amount of oil and control their fuel spend.”
Planning ahead of winter, distributors should ensure that customers are frequently reminded as to the options available.