LPG costs and surcharge

Hello,

I'm just looking for a bit of advice about the norm for LPG bulk pricing (domestic) please. We moved house a while ago and signed a 2 year contract - the first year of which was a "fixed" price per litre and the second it went to a variable rate.

The initial cost in December 2021 was 39p/litre and they fairly quickly added an 18p/litre "surcharge" due to market pricing (I imagine when Russia invaded Ukraine). That surcharge has been on ever since. We've now moved to year 2 of the contract and the price is 46.5p/litre with a 15p surcharge so I've just placed an order at 61.5p/litre. I don't think I have much choice as I can't go elsewhere at the moment due to the contract.

It's difficult to understand the economics of fuel pricing - up like a rocket, down like a feather seems apt but I'm sure there is more to it and I understand that businesses do need to make a profit.

As I understand it, LPG is propane and looking here the cost seems to be down almost 40% over the last year: https://tradingeconomics.com/commodity/propane

So 2 questions for me - 1) is it normal to have a fixed price contract where one side can vary the price via surcharge whenever they like? (I'm sure the very small print will allow them to do this and I'll have to dig the contract out to review).

And 2) what is everyone else paying per litre at the moment please as it "feels" like I'm being taken for a ride?

I'm not new to LPG - I had it at my previous house for 15 years but with a different supplier and never experienced the surcharge.

Many thanks.

Have just dug out the contract and (of course) they can do it - the wording is:

"The Company reserves the right to add a temporary surcharge to the price if the wholesale market price increases by more than 20% above that of the Agreement date or increased transportation costs."

I suspect they can just hide behind "increased transportation costs" here as they can make up any cost increase to levy the surcharge.

I can't seem to find anywhere online that will tell me what the wholesale price of LPG was on 21/12/21 and what it it today to check the 20% increase position - does anyone have any insight they can share here please?

Thank you.

My provider do the same (Extra gas). My current deal is currently up and the renewal quote is similar from across the providers.

My latest quote is £.50 p ppl. With no surcharge for two years fixed.

The only difference is the rental charge between providers.

Extra gas have been really good with deliveries. Where I have read some poor reviews with delivery times with other providers when I googled the reviews.

Other options have been flo gas and avanti.

I am holding off on a new deal till the summer. I have enough in the tank to get me through.

Thanks Middo, appreciate the response. Your renewal quote seems sensible - none of the year 2 uplift or random surcharge stuff.

Don’t know if if helps but lpg save will do a comparison search for you

This is my recent quote

Thank you again for contacting LPG-Save in relation to your Home Bulk Tank LPG supply.

Having completed the work, I was just wondering if you had yet had the opportunity to consider the 'Supplier Switch' proposal that we had managed to negotiate for you with our preferred supplier, Flogas - Flogas Britain Ltd - www.flogas.co.uk

Based upon the information provided and in light of the current cost of wholesale LPG, I am now delighted to re-confirm the details of the Supplier Switch Offer made:

[emoji818] Year 1 and Year 2 Gas Price - 50 pence per litre, so 'Fixed for the full 24 months' of the Supply Agreement term (+vat @ 5%)

[emoji818] Tank Rental (Standing Charge) - £60pa (Above Ground Tank) or £80pa (Below Ground Tank) + vat @ 5%

[emoji818] Free Telemetry Unit - for Automatic Top-up (if required)

[emoji818] £40 M&S Gift Card - upon first delivery of gas, courtesy of ourselves.

[emoji818] No additional costs will be applied for 'Operational Costs', that with some suppliers can increase your overall price by up to 20 pence per litre (+vat @ 5%) over the Agreement term.

Thanks again - that looks like a decent deal. I'm going to call them tomorrow and see what can be done as I'm still under contract until December. Appreciate your replies and comparison advice, thank you.

Thanks for that Middo, we are with Calor and I’ve just paid £1000+ for the latest tank fill.

Hopefully I can get a much better deal. [emoji1696]

No problem, I would be interested to hear how you get on

I’ve just had a quote which is the same as yours. They split the tank rental into a daily charge of 21.9p which equates to the £80 you were quoted.

I called and explained my issue. We've agreed on a new contract starting today at 50p/litre fixed for 2 years which is as per your quote. Thanks again!

Glad it worked out.

Renewal offer has just some in at 53.5 ppl. I’m holding off till the summer