DCC subsidiary told to change oil contracts by UK watchdog

ONE OF DCC’S largest subsidiaries, oil supplier GB Oils, has been compelled to change its oil contracts with customers, following an inquiry by the Office of Fair Trading in Britain.

GB Oils Ltd was found to be in breach of British consumer legislation in relation to its charging mechanism, whereby customers could be charged one price on ordering oil, and then charged a higher price on delivery.

The Office of Fair Trading has now secured legally binding undertakings from GB Oils to change its terms and conditions, ensuring prices quoted at order remain fixed until delivery.

It comes on foot of a two-year probe by the British regulator into the off-grid energy market in Britain.

In a statement, GB Oils said that, while a clause permitting price changes between the time of order and delivery existed in its terms and conditions, and was intended to cover exceptional circumstances only, it was never used.

“Our policy is to always quote the consumer a price for their spot order and that price remains fixed until delivery regardless of fluctuations in the underlying market price,” the statement said.

GB Oils is one of the largest suppliers of home heating in the UK. It is part of DCC’s energy division, which represented 73 per cent of the company’s overall revenue last year, and 45 per cent of its operating profits.

Last year, GB Oils was fined €51,000 by a court in Wales for overcharging customers. GB Oils pleaded guilty to the offences, arguing that it was due to a breakdown in the company’s system during a period of unprecedented demand in the winter of 2009-2010.

Separately last year, the Office of Fair Trading ruled that DCC had not been transparent in outlining to consumers the links between the company and Boilerjuice, a price comparison website it owns.

Last week, the UK Competition Commission provisionally cleared DCC’s acquisition of oil distribution assets previously owned by Total in Britain.

The Competition Commission found that the deal would not result in a substantial lessening of competition in the oil distribution market in Britain.

Earlier this month DCC, which had revenue of more than €10 million last year, reported a “solid start” to its financial year.

Overall trading in the first quarter ended June 30th was ahead of predictions, the company said.