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Sparsholt Parish Plan Newsletter No 4: Fuel-Purchasing Cooperative - Updated

on Wed, 30/11/2011 - 4:00pm

*** Update 30/11/11 ***

The November oil price for members of the Fuel-Purchasing Cooperative scheme was 55.5p per litre. The average price quoted was 62.0p per litre and the highest price quoted was 71.0p per litre.

Introduction

The Times newspaper reported that 4.3 million households that use either oil or LPG pay about a third more than those on mains gas. Because oil and LPG do not fall under the remit of Ofgem, there is little protection for consumers. This has led to many rural communities forming purchasing cooperatives to buy their oil as cheaply as possible.

Parish Plan Background

Analysis of parish plan questionnaires showed that an exceptionally high number (58 out of 123) of households expressed an interest in joining a cooperative. Some are already members of schemes run by other local villages. The table below shows the level of interest in the Parish.

Parish Area

Households Expressing an Interest

Blacklands & Churchway

4

Eastmanton

3

Outlying Properties

7

Sparsholt Central

4

Watery Lane

5

West Street

10

Westcot Lane

13

Westcot North

6

Westcot South

6

Grand Total

58

 

The advantage of a purchasing cooperative is that most distributors quote a lower price on volume orders because it reduces delivery costs. What's more, that price is available to all members of the cooperative irrespective of the volume ordered.

Research into purchasing cooperatives established that oil schemes are the most popular. This is probably due to the more onerous conditions placed on consumers that wish to switch LPG distributor.

Oil-Purchasing Cooperative

The working group set up to identify the most suitable purchasing cooperative for Parish residents examined the following options:

  • A local (parish-based) cooperative
  • A cooperative run by a nearby community.
  • The countywide ORCC[1] run cooperative.

They recommend the ORCC cooperative. It was set up in 2009 and now has 470 members, including residents in Childrey and Sparsholt. The process involves a local coordinator who passes member’s orders to the ORCC each month. The ORCC selects the distributor that quotes the best price. The distributor contacts each member directly to arrange delivery and collect payment. There is an annual membership fee of £20. For the time being, Jane B, Childrey’s coordinator has agreed to take on new members from the Parish although the need for a separate coordinator ultimately depends on the additional workload of looking after a larger group.

The working group discounted the option to set up a parish-based cooperative because of the work involved in starting from scratch and that it would largely result in a duplication of effort. They also discounted the option to join another cooperative because of the ones identified they either restricted membership to the immediate local area or were too far away to make it a realistic proposition.

Oil-Purchasing Cooperative Savings

Below are case studies prepared by individual members of the working group. They illustrate the savings that could have made had they ordered their oil with the ORCC over the past 12 months.

Case Study-1

 

Volume

4,300 litres

Actual Price Paid

£2,829.59

ORCC Negotiated Price

£2,522.10

Annual Saving

£307.49

Membership Fee

£20

 

Case Study-2

 

Volume

1,455 litres

Actual Price Paid

£976.26

ORCC Negotiated Price

£843.31

Annual Saving

£132.95

Membership Fee

£20

 

Case Study-3

 

Volume

1,736 litres

Actual Price Paid

£1,189.22

ORCC Negotiated Price

£1,026.02

Annual Saving

£163.20

Membership Fee

£20

 

Note. Oil prices vary from day to day. The case studies include purchases made on different days to the orders placed by the ORCC. As a result, the indicative savings could be more or less than those stated above.

LPG-Purchasing Cooperative

The main obstacle to forming an LPG purchasing cooperative is that consumers are required to sign a 2‑year contract. Consequently, it is not possible to “shop around” for a competitive price from a different distributor during the contract period.

Tank ownership is another complication. Whilst it is possible to switch distributors, this can be tricky when the distributor applies current regulations retrospectively.

Join Up Now!

Residents that wish to join the ORCC oil scheme should complete the accompanying form (see link below) and send it together with your membership fee to the ORCC. Alternatively, go to www.oxonrcc.org.uk and follow the links to the bulk oil-purchasing scheme to find out how to place your order. Jane B (baldryhome@btinternet.com) is the local coordinator who lives in Childrey

LPG consumers should contact Andrew O on:-

or at andrew@hedgesandogilvie.co.uk. Andrew will arrange a meeting to assess the viability of forming an LPG purchasing cooperative.

Further Action

1.      Publicise the ORCC scheme to encourage interested residents to enrol.

2.      Advise the ORCC administrator that Sparsholt residents are to enrol and Childrey’s coordinator is to manage orders at least for the time being.

3.      Identify a volunteer to take on the role of Parish Coordinator should the additional workload become too much for Childrey’s coordinator.

 

Submitted by Andrew O, Parish Plan Steering Group, 8/11/11



[1] Oxford Rural Community Council