With home heating oil prices doubling in a week, should bills be regulated? |
REGULATING the price of home heating oil in Northern Ireland would be surprisingly straightforward.
It would be unusual – most developed countries leave it entirely up to the market – but it could certainly be done.
John French, chief executive of the Utility Regulator, told the BBC this week that he could take on the task if Stormont included it in his remit, although he added: “We cannot reduce the price below what the fundamentals of the market is.”
Regulation would not mean subsidised oil or one-off emergency payments.
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Its main aim would be to control the excess profits made when the global price of oil jumps up and the price to consumers immediately follows, even for oil already in suppliers’ storage tanks or ordered using contracts that fix the price months ahead.
Most of the 300 or so oil delivery companies in Northern Ireland are too small to use such contracts and have only a day or two of storage, putting them effectively in the same boat as their customers.
But that is not the case for their suppliers, the four companies that import oil into Northern Ireland through facilities in Belfast and Derry.
They can use a mix of storage and contracts to hedge against........