Watchdog warning over oil prices

Fuel costs have not come down as quickly as oil prices, the council says

The Consumer Council has warned it may refer the issue of home heating oil prices to the Office of Fair Trading.

It said despite the cost of crude oil falling, households in Northern Ireland were waiting to get the full benefit.

The council said the price of crude oil had dropped by more than 50% from a peak of 139 US dollars a barrel in June to 58 dollars on Wednesday.

However, the NI Oil Federation said crude oil did not heat homes and other costs had to be taken into account.

"The retail cost of home heating oil is based on the cost, demand and availability of refined product out of Rotterdam and is sold in dollars," the federation's David Blevings said.

"If the consumer council had done its homework they would see the figures they have mentioned from February 07 to today, there's a 50% increase in the wholesale kerosene price."

But consumer council chairman Steve Costello said the oil industry must assure customers they "were paying a fair price".

The council said the price of 900 litres of home heating oil had fallen only 25% from £558.68 to £416.40 between June and Wednesday.

"When the price of crude oil goes up, the industry is quick to pass this onto consumers but it does not appear to be the same story when it comes down," Mr Costello said.

"Since the summer, the cost of crude oil has fallen by more than half and consumers have anxiously waited to see the full benefit being passed on to them when they fill their tank.

"In our view, this has not happened in the home heating oil industry. Consumers will no longer accept at face value the vague explanations being given about currency exchange rates or an increase in demand without the evidence to stack it up."

He said that the council would consider using its super-complaint powers to refer the issue to the Office of Fair Trading if it did not get answers it said it needed.