As we all feel the pinch with rising energy prices and the cost of living crisis, we wanted to take a look at how the Government Energy Price Guarantee affects those living off-grid with no access to the mains gas network, but are instead using heating oil or LPG to heat their homes. With changes at the top end of Government and announcements being made and subsequently changed regarding help with spiralling energy costs, in this blog we take a look at why there is an energy crisis, why the Energy Price Guarantee has been introduced, what the Government is doing to help households throughout the UK whether on mains gas or living in off-grid homes, and when you should order your central heating oil this winter.
Why is there an energy crisis?
First, let's consider why we have an energy crisis.
Many factors affect energy prices globally, and as the world began to recover after the pandemic, an increase in global demand resulted in gas and electricity prices rising as economies re-opened from Covid 19 lock-downs. This coincided with Russia’s invasion of Ukraine in February this year which led to cuts in gas supplies to Europe, and sent natural gas prices to a record high as well as triggering rises in electricity prices.
Whilst Russia is one of the world’s largest producers of oil and gas, here in the UK we are less reliant than Europe on Russian imports, with only 4% of our natural gas imported from Russia last year. Nevertheless, with soaring prices, UK householders are being faced with high energy costs this winter, and the Government has stepped in to help households deal with the energy price crisis.
The Energy Bills support scheme
You should already have started to benefit from the Energy Bills Support Scheme (EBSS) which will provide every household with a domestic electricity connection a non-repayable discount of £400 to help offset higher energy bills. Payments are being paid monthly and will be delivered over a 6 month period which started in October this year via electricity suppliers. However, it’s not such great news for approximately 1% of UK households who are currently ineligible if they do not have an electricity meter and a direct relationship with an electricity supplier.
The Energy Price Guarantee
In the fiscal statement on 8th September this year, the then Prime Minister, Liz Truss, announced several measures to combat the rise of energy costs for householders in the UK. The Energy Price Guarantee, to take effect from 1st October, was one of them and is in addition to the £400 Energy Bills Support Scheme announced earlier this year. Designed to protect customers from increases in the cost of gas and electricity by limiting the amount suppliers can charge per unit of energy used, the Energy Price Guarantee is a temporary measure that limits the average bill for a typical household in Great Britain to an annual equivalent of £2,500. However, whilst Chancellor Jeremy Hunt has announced that the level of support with energy costs will be extended beyond April next year, he has also said that it will be scaled back.
It is important to note that energy bills will be based on actual usage – use more, you’ll pay more, use less you’ll pay less. How much energy you use depends on a number of factors, such as how many people live in your home, how much time you spend there, and how well insulated your property is.
Does the Energy Price Guarantee apply to heating oil and LPG households?
Unfortunately, the short answer is ‘no’! The Energy Price Guarantee does not include households that are on alternative methods to mains-gas such as oil central heating or LPG to heat their homes, as it only applies to those that are on the mains-gas grid.
What help is available for off-grid homes?
The good news is that there is still help available for households that user heating oil and LPG to heat their homes – and this is on top of the £400 you’ll get from your electricity supplier! Alternative and targeted support has been announced for those not eligible for the Energy Price Guarantee to help with the cost of energy bills. In his plan to tackle the rising cost of living, the Chancellor announced The Alternative Fuel Payment (AFP) which will provide a one-off payment to be made to UK households not on the mains gas grid and therefore using alternative fuels to heat their homes, for example those with oil fired central heating, LPG, coal or biomass. Initially this payment was set at £100 but was doubled to £200 in the Chancellor of the Exchequer, Jeremy Hunt’s, Autumn Statement on 17th November 2022.
How and when this payment will be paid are still to be confirmed - details as to how customers will receive the support are still sketchy, and we’re yet to find out when this money will be paid. However, those living in off-grid homes will still receive the £400 grant from the Energy Bills Support Scheme, and for those that usually receive a winter fuel payment, this still applies this winter.
The Government has also said that it will continue to monitor prices of alternative fuels such as domestic heating oil and will consider further intervention if required.
Keep an eye on our news pages for all the latest energy updates. As soon as we find out anymore, we will share it with you there. And don't forget to read our free advice on saving water at home, heat pumps and home heating gadgets.
When should I order my heating oil?
You may be wondering whether you should wait to receive your £200 support payment before placing your winter order to top up your heating oil tank. Well, UKIFDA, the UK and Ireland Fuel Distributors Association, whilst welcoming the further increased support for domestic heating oil users, ‘recommends that customers purchase heating oil as normal ahead of the winter period’ and get ready for the colder weather by topping up their heating oil tanks sooner rather than later.
And we agree – so the message is order now and don’t wait. Plan ahead for cold weather and don’t wait until the last minute – order your heating oil in plenty of time and before you get close to running out. As we head into winter, demand will increase, and with increased demand comes increases in prices. for more information, check when is a good time to buy your heating oil.
We can also help with your winter fuel bills. Our Flexi Saver Plan helps you plan ahead, with easy and flexible monthly payments to take the worry of big winter bills away, no service charges and a free upgrade to our more economical Premium Heating oil which can improve boiler efficiency by up to 15%. We've also got some great tips on getting ready for winter and saving on your energy bills, and saving during Autumn. And don't forget to keep an eye on our news pages for all the latest energy updates.
Contact us today on 01423 770 666 or get a quick quote here. Read more expert insights and news from Northern energy; The future of HVO - an alternative greener fuel choice coming soon!