The Heating Oil Price Comparison Site WhichOilSupplier.co.uk

- does not charge the consumer to use the site

- does not charge any supplier to the use the site (no commissions, no annual fee, no nothing)

- does not take payment or credit card information from any consumer ordering oil

- shows consumers the logo of the supplier alongside each price

- pays for the running of the site through google advertising

- is fundamentally a public service site that puts the consumer first

Our price comparison site works with some of the finest independent oil suppliers in the UK – companies who believe in excellent customer service, who work hard to win repeat business from consumers and who offer fair prices for heating oil. We are proud to work with these companies, many of whom are family run, and we thank Oil NRG, Celtic Fuel Oils, Cooke Fuels, Countrywide, Monument Fuels, Birmingham Fuel Oils, Potteries Fuels, FC Dawes & Son, Three Counties Fuel, Highland Fuels, Peak Oil and Chandlers Oil & Gas for their support of WhichOilSupplier, which we launched in January 2010.

It was disclosed in the Daily Telegraph yesterday that DCC intends to sell the website Boilerjuice back to one of its original owners (and current Managing Director), Paul Ward. DCC is rumoured to have paid over £1 million for the site and this major U-turn comes just a few weeks after OFT criticisms and before a formal report into the heating oil market later this month.

The Telegraph quotes a DCC representative as saying “Boilerjuice was, and remains, an independent price comparison website, comparing our prices and those of hundreds of independent suppliers to offer buyers the best prices in their area. Unfortunately, this independence was questioned by some quarters of the media, albeit incorrectly, because of our ownership of the site. We have therefore sold Boilerjuice to its managing director, Paul Ward, and wish him continued success at giving consumers a truly independent means of finding the best prices.”

The phrase “hundreds of independent suppliers” seems a bit odd -there are only about 250 members of the Federation of Petroleum Suppliers. A large proportion of these are not independent, others have multiple memberships for the different regions they cover and a large number do not supply heating oil at all eg the oil tank companies that are members.

DCC to expand its oil distribution businessin Britain, the Isle of Man and the Channel Islands

DCC plc has reached conditional agreement with Rontec Investments LLP (”Rontec”) to acquire certain oil distribution assets currently owned by Total in Britain, the Isle of Man and the Channel Islands (”the Acquired Businesses”). Rontec reached conditional agreement in June 2011 to purchase the Acquired Businesses as part of a larger transaction with Total. DCC’s acquisition is conditional on Rontec completing its transaction with Total, which is expected to take place in late 2011.

The Acquired Businesses together employ 550 people and sold 1.5 billion litres of fuel in 2010.  The key components of the Acquired Businesses are:

·     The trade, fixed assets, stock and goodwill of Total Butler, a transport, commercial and home heating oil distribution business with sales volumes in 2010 of 670 million litres.  Total Butler has a network of 40 depots across England and Wales and a fleet of circa 200 leased delivery vehicles.

·     Contracts to supply transport fuels to circa 300 dealer owned dealer operated retail service stations (currently branded Total).  Volumes sold under these contracts in 2010 amounted to 710 million litres. 

·     The entire issued share capital of Total’s oil distribution and retail service station businesses on the Isle of Man and the Channel Islands.  In 2010, together these businesses sold 120 million litres of fuel. 

The expected total consideration payable by DCC for the Acquired Businesses together with the estimated value of stock to be acquired is €67 million (Stg£59 million), and will be satisfied in cash at completion. The goodwill at completion will be approximately €43 million (Stg£37 million). 

Tommy Breen, Chief Executive of DCC plc, said today:

“This acquisition represents a further significant step forward in DCC’s growth strategy in oil distribution in Britain.   It will considerably extend DCC Energy’s presence in England and Wales and will also enhance our ability to serve customers throughout the market.”

The Austrian agricultural product company RWA won EU approval this week to acquire the heating oil division, OMV Waerme, from Austrian oil group OMV.The sale was announced in February 2011 and the buyer is a consortium led by RWA Raiffeisen Ware Austria Aktiengesellschaft which will take over all 42 employees of OMV Wärme VertriebsgmbH as well as the six sales offices.With this move, OMV has completed the restructuring of its heating oil business in Austria and Germany; it has previously sold OMV Bayern GmbH to Kreuzmayr GmbH of Eferding, (Upper Austria) in 2008. This means that heating oil will now be sold to private customers only through brand partners. Besides these brand partners OMV will continue to provide direct support to large customers.

Total has signed a sale and purchase agreement to sell most of its Marketing assets in the United Kingdom, the Channel Islands and the Isle of Man to Rontec Investments LLP, a consortium led by Snax 24, one of the leading independent forecourt operators in the UK.The assets included within this agreement consist of Total’s UK retail network, comprising 810 Total-branded service stations, its Butler heating oil business, the associated logistics infrastructure, as well as its Channel Islands and Isle of Man businesses.The Rontec Investments consortium comprises Snax 24, one of the leading independent forecourt groups in the UK; Grovepoint, a London-based, independent principal investment firm; and Investec, an international specialist bank and asset manager.

This transaction, which is expected to complete later in 2011, is in line with the Group’s strategy of rationalising its downstream portfolio in Europe. The sale process for Total’s refining assets in the UK is ongoing

In addition to its exploration and production operations, Total will retain a direct market presence in the UK through its lubricants, aviation fuels, special fluids and chemicals businesses.

The Sunday Times has reported that DCC has made an offer for Total SA (FP)’s U.K. This would include around 800 petrol stations and the heating oil business.

The paper also stated that Total received offers from Harvest Energy (backed by private equity firm Ion Equity and Greenergy International Ltd.

There is no formal press release from DCC or Total at this point.

DCC plc has reached conditional agreement to acquire the entire issued share capital of Pace Fuelcare Ltd (”Pace”), a British oil distribution business, from MRH (GB) Ltd. The acquisition is subject, inter alia, to clearance from the UK Office of Fair Trading.

In its financial year ended 26 September 2010 Pace sold 515 million litres of fuel to independent retail petrol stations and a broad range of commercial, industrial, agricultural and domestic customers. With approximately 240 employees, Pace operates from 20 locations across southern England and has a fleet of 86 road tankers.

The consideration payable for Pace, on a cash free/debt free basis, is €27.7 million (Stg£23.4 million). The consideration is payable in cash.

Tommy Breen, Chief Executive of DCC plc, said :

“The acquisition of Pace Fuelcare will further enhance DCC Energy’s oil distribution business in Britain, bringing its market share to approximately 15%. Pace has a particular strength in the distribution of transport fuels in southern England and will be complementary to DCC Energy’s existing business.”

Copied below is a press release issued by DCC:Over the past three weeks The Sunday Times has published a series of articles containing very serious allegations that DCC’s British oil distribution business, GB Oils, has been “ripping off” its customers, “fleecing OAPs” and “inflating customer bills”. The Sunday Times articles contained many inaccuracies and unsupported allegations. DCC completely refutes these misleading allegations and wishes to set the record straight.
DCC has endeavoured to cooperate with The Sunday Times in order to ensure it could report accurately and fairly. Despite this cooperation the newspaper has continued to report in a selective manner and in a way that predominantly fails to present the facts either accurately or fairly (as commented on further below). This is extremely disappointing.

In Britain GB Oils is the leading distributor of transport and heating fuels to c. 450,000 domestic, commercial, industrial and agricultural customers throughout the country and has a market share of approximately 14%. In its last financial year to 31 March 2010 GB Oils sold 4 billion litres of oil products, of which approximately 19% was kerosene, the heating oil product for domestic users.GB Oils has acquired a number of businesses in the oil distribution sector in Britain since entering the market in 2001. As there is considerable local goodwill associated with the brands acquired with these businesses, GB Oils has continued to sell product under these familiar national, regional and local brands. DCC believes that GB Oils is the most efficient oil distributor in the British market and provides the best customer service. During the recent severe weather conditions GB Oils worked tirelessly to meet its customers’ expectations and to ensure they did not run out of product. By leveraging its extensive infrastructure GB Oils was able to deliver product to its customers within shorter lead times than many of its competitors. In addition, the business went to extreme lengths to deliver product to customers in remote areas that were not accessible by truck. GB Oils’ prices are competitive and remained competitive during this period.

The oil distribution industry in Britain remains very fragmented with in excess of 175 distributors and is highly competitive, a fact evidenced by the low margins in the industry.  DCC’s Energy division generated an operating profit margin of c. 2.5% (or less than 2 cent per litre) in its financial year to 31 March 2010 and no significant change is expected in its financial year to 31 March 2011.

Heating Oil Prices

The industry sells commodity products, the prices of which change on a daily basis driven by a range of factors including international oil prices, exchange rates, excise duty and VAT. In particular, domestic heating oil prices are also affected by local factors such as the costs of storage, the risk of scarcity, increased environmental regulation and the competitive environment. The heating oil segment of the market is very seasonal with significant increases in demand at times of colder weather. The industry actively endeavours to convince its customers to spread their purchases of fuel throughout the year, however in practice demand soars when the temperature drops significantly, leading to pressures on the industry to deliver product within short lead times.

The recent very severe weather conditions led to unprecedented demand and shortages of product. These factors, together with the challenges of poor road conditions during the snow, led to increased delivery lead times, fewer orders delivered per truck per day and higher costs. With constraints on supply, higher costs and hugely increased demand, heating oil prices increased across the market. However, with the recent improvement in weather conditions, prices have started to fall back.

Misleading Allegations by The Sunday Times

The Sunday Times articles claim that “DCC enjoys a virtual monopoly in parts of Britain” in the heating oil market. This is not the case. There are in excess of 175 other oil distributors in Britain. A list of distributors can be obtained from the industry body, The Federation of Petroleum Suppliers. In every local area in which GB Oils operates it faces strong competition, in most cases from many competitors, as well as the constant possibility of new entry and expansion from others from outside that area. The barriers to entry in this industry are low; existing competitors are continually expanding their geographic footprint and new competitors frequently enter the market.

The Office of Fair Trading (”OFT”) carried out a detailed investigation into the acquisition by DCC of CPL Petroleum Limited which was unconditionally cleared by the OFT in August 2007. More recently in April 2010 in clearing the acquisition by GB Oils Limited of the oil distribution business of Brogan Holdings Limited on the British mainland (as part of this, by agreement with the OFT, DCC disposed of a very small business in the Western Isles of Scotland) the OFT concluded that “there is no realistic prospect of a substantial lessening of competition in the distribution of heating oils and transport fuels in local areas in mainland Scotland and Northern England. In particular, the OFT believes that across each locality where the parties have depot facilities, a sufficient number of competing distributors will remain to provide a constraint on the parties post-merger - including competitors from outside the locality.” The full text of the OFT’s decision on the completed acquisition by GB Oils Limited of Brogan Holdings Limited can be downloaded atwww.oft.gov.uk/shared_oft/mergers_ea02/2010/GB_Oils-Brogans.pdf

DCC absolutely refutes the misleading allegations of “ripping off” its customers, “fleecing OAPs” and “inflating customer bills” made by The Sunday Times.

GB Oils does not “inflate” customer bills as alleged in The Sunday Times article of 23 January. GB Oils’ policy is that the price it quotes to its customers is the price that the customer is invoiced and in the event of any administrative errors credit notes are issued. DCC absolutely refutes any allegation that GB Oils has defrauded its customers.

There are also examples quoted by The Sunday Times in relation to customer experiences which contain material inaccuracies:

-     In the article on 9 January 2011, it was alleged that in December 2010 a particular customer was quoted £643 for a 500 litre delivery; however, GB Oils’ records show that the customer was actually quoted 75.99 pence per litre, and having agreed to waive the emergency delivery charge the total cost to the customer would have been the equivalent of £398.95 (including VAT) for 500 litres.

-     In the article on 23 January 2011 there are again material inaccuracies in relation to deliveries to Mr. Roger Williams MP. GB Oils’ records show that Mr. Williams ordered 2,300 litres of home heating oil (kerosene) on 4 October 2010. GB Oils delivered 1,733 litres of kerosene on 7 October 2010 at a price of 43 pence per litre. The second delivery of oil referred to by Mr. Williams arose from a completely separate order he placed on 7 December 2010 and actually related to 1,000 litres of gas oil and not kerosene as implied by the article. Apart from the difference in order dates, gas oil and kerosene are different products with different pricing formulae. Mr. Williams was quoted a price of 62 pence per litre for the gas oil and this was delivered on 14 December. In both cases Mr. Williams was invoiced for the price he was quoted.

DCC has also been accused of using its price comparison website BoilerJuice.com to mislead customers.  Contrary to the impression given by the articles in the Sunday Times, BoilerJuice.com currently works with c. 50 suppliers that are not owned by DCC, which are proactively recruited and encouraged to offer their best prices so as to create strong competition within the market place.  The modus operandi of the website has not changed since the acquisition of BoilerJuice by the DCC Group.  It continues to be impartial and the great majority of its participating suppliers (approximately 75%) are independent of GB Oils. Each and every supplier is treated equally throughout the process.  BoilerJuice does not profit from increases in the price of heating oil.

Carmarthenshire County Council

DCC acknowledges that Carmarthenshire County Council is investigating customer complaints made to it relating to GB Oils’ business in South Wales arising from January 2010. DCC strongly denies that GB Oils has been engaged in any fraudulent activity or unfair trading concerning pricing or that any criminal offences have been committed.  DCC has sought to cooperate fully with this investigation.

Minister for Energy & Climate Change request to the OFT

DCC has noted the statement made by the Minister for Energy & Climate Change on 21 January in which he says that he has asked the OFT to bring forward its competition and consumer study into off-grid energy. DCC welcomes this initiative by the Minister and looks forward to making a positive contribution to any market analysis conducted by the OFT.

Press Release from 14 January from Unite website:The greed of an industry worth billions has led to mounting frustration amongst Britain’s oil and petrol tanker drivers, whose union representatives have agreed to ballot their members for industrial action. The ballots are likely to take place next month.

Unite union representatives have warned the oil industry that employers must take their heads out of the sand and realise that the constant attack on tanker drivers’ terms and conditions must stop.

Over the past 10 years, multiple contractors responsible for the delivery of oil and petrol supplies to petrol stations and supermarkets across the country have been consistently squeezing the terms and conditions of around 3,000 tanker drivers. The constant transfer of contracts between contractors has led to drivers’ wages, pensions and working conditions being eroded. The pattern has become particularly pronounced over the last 18 months.

The drivers’ demands are reasonable. They are calling on the industry to introduce national standards to stop this race to the bottom. However, the main players in the industry have refused to even meet with the unions to discuss the proposals. Last September Unite wrote to the oil companies and the retailers asking for a meeting to discuss its members legitimate concerns, however Unite was turned down. In the same month the union wrote to the haulage companies asking for a meeting, Unite was turned down.

Unite general secretary-elect, Len McCluskey, said: “Tanker drivers play a crucial role in the economy, delivering fuel safely and on time, but their industry which is worth billions is content to attack the drivers’ pay, pensions and conditions.

“The price of oil is heading for $100 a barrel, this is not an industry suffering like many others, the profits are astronomical. Employers have their heads in the sand, if they think they can continue to attack these drivers’ terms and conditions.

“This is not about pay. Our demands are very reasonable. We are calling for national standards to bring stability to the industry. It would benefit our members but it would also benefit the multitude of contractors in the industry too.

“Time and workers’ patience is running out, so we appeal to the key stakeholders to engage with Unite urgently to find a better way forward.

“Minimum standards on safety and decent terms and conditions are a prerequisite for success in this sector. The attacks on workers’ pensions must cease and the merry-go-round where drivers can have as many as 12 different employers must stop too. Quite simply enough is enough.”

Unite expects the employers to get round the table to resolve the outstanding issues through negotiations. However, In the past when disputes did get to the point where industrial action was required the union ensured that fuel supplies for essential services were not affected.

Platts, a leading global provider of energy and metals information and a division of The McGraw-Hill Companies, Inc. (NYSE: MHP), today announced an agreement to acquire Oil Price Information Service, LLC, (OPIS) from United Communications Group (”UCG”), a privately held business information provider. OPIS, which is headquartered in Gaithersburg, is a leading provider of news and price information to the wholesale and retail petroleum markets in North America. The purchase price was not disclosed.The acquisition is expected to be completed in the first half of 2011, subject to regulatory approval.”OPIS is a great complement to Platts. It supports our growth strategy by expanding our presence in North America and extending our price reporting into the wholesale and retail petroleum markets,” said Larry Neal, president of Platts. “The combination of Platts and OPIS data will bring greater transparency to the markets by giving customers greater insight into the petroleum supply chain – from crude trading to retail sales.” Neal added that Platts expects to maintain OPIS’ products and services. “We intend to build on OPIS’ respected position in the market, its track record in product development, talented staff and committed customer base to enhance the value of its offerings and serve a larger audience.” OPIS CEO Brian Crotty said, “We are delighted to join forces with a firm that is so well-respected within the energy industry. With the credibility and resources of Platts and McGraw-Hill behind us, we will be able to expand our product and service offerings to customers and develop new ways to serve the energy information markets.”Founded in 1977, OPIS provides posted prices for more than 400 wholesale terminals and retail fuel prices for over 120,000 gas stations. In addition to serving the rack and retail markets, it produces 4,000 price assessments for seven U.S. spot markets. Its broad customer base includes refiners, traders, brokers, large end-users, suppliers, wholesalers, fleets and consumers. The company maintains a database of more than five billion historical spot, rack and retail prices and delivers the majority of its news and pricing information to customers electronically.About Platts: Platts, a division of The McGraw-Hill Companies, is a leading global provider of energy and commodities information. With a century of business experience, Platts serves customers across more than 150 countries.