ENERGY PRICE GUARANTEE: WHAT DOES IT MEAN FOR OIL-HEATED HOMES?
Update 13/04/23
Change in £200 Domestic Alternative Fuel Payment terms
The government today, 12th April 2023, has extended the receipt window for those heating oil customers wishing to apply through the government portal for their £200 domestic alternative fuel payment.
The previous window was from September 2022 to May 2023. This window has been extended back to June 2022 to ensure that households who purchased fuel in bulk ahead of the winter are able to receive the £200 energy bill support they are entitled to.
The AFP application portal can be found here: https://www.gov.uk/apply-alternative-fuel-bill-support-if-not-automatic and will be open until the end of May.
For applicants without online access living in Great Britain, the contact centre helpline number is 0808 1753943.
The helpline is open from 8 am to 6 pm on Monday to Friday, and a representative will guide applicants through the process.
To apply through the portal, customers will need to have the following ready:
- Proof of address
- Bank account details
- Proof of heating oil purchases with a value of £200 or more and with a date between May 2022 and the end of the application window (31 May 2023).
After a number of checks, customers will receive payments through their local authority. Be aware of scams.
We advise customers to be aware that no one will contact them about this matter unless they first contact the government.
PLEASE NOTE
The vast majority of customers who use heating oil for their homes should have automatically received the £200 Alternative Fuel Payment via their current electricity provider. The government utilised data they have identifying properties “not on the gas grid” as a means of capturing qualifying homes. There is a recognition that this will mean some people are not automatically credited. We would recommend you check your bank and your electricity statement for the past 3 months. If you don’t see the payment being made, please use this link https://www.gov.uk/apply-alternative-fuel-bill-support-if-not-automatic to apply for the £200.
HELPFUL INFORMATION
WHAT WERE THE MEASURES ANNOUNCED TO HELP HOUSEHOLDS WITH THEIR ENERGY BILLS?
- Energy Bills Support Scheme – The Energy Bills Support Scheme provides a £400 non-repayable discount to help with energy bills over the coming winter. All households with a domestic electricity connection in England, Scotland and Wales are eligible and the discount is automatic.
- The new Energy Price Guarantee – The Energy Price Guarantee reduces the unit cost of electricity and gas, so typical households will pay around £2,500 a year for the next two years. This is applied in addition to the Energy Bills Support Scheme
- £1200 of support to the most vulnerable UK households paid in instalments over the year through discounts to Council Tax and Cost of Living payments.
HOW WILL THE ENERGY BILLS SUPPORT SCHEME WORK?
The Energy Bills Support Scheme provides a £400 non-repayable discount to households to help with their energy bills over winter. All households with a domestic electricity connection in England, Scotland and Wales are eligible. The £400 discount will be automatically applied to monthly household electricity bills for 6 months, starting from October 2022.
Households will receive:
- £66 in October and November
- £67 in December, January, February and March
The discount will be received monthly, even by those who pay for their energy costs quarterly or use a payment card. Traditional prepayment meter users will receive equivalent vouchers which they will need to redeem.
HOW WILL THE ENERGY PRICE GUARANTEE WORK?
The Energy Price Guarantee limits how much consumers are charged per unit of gas or electricity. The discount is applied automatically when your bill is calculated. Your exact bill will still be influenced by exactly how much energy you use.
This means that dual fuel customers on a standard variable tariff paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October. Unit price reductions of up to 17p/kWh for electricity and 4.2p/kWh for gas will apply to fixed tariff customers that currently have unit rates above the Energy Price Guarantee.
This will cap energy bills at £2,500 for a typical household, based on the median average usage for all properties across the UK. This represents a saving of over £1,000 a year, based on the October Ofgem energy bills price cap of £3,549.
CAN I GET HELP WITH HEATING OIL COSTS?
Off grid households will also receive additional help with heating oil bills.
Households which are not on the gas grid but are connected to the electricity network will still receive support on their electricity costs through the Energy Price Guarantee. They will also receive support through the Energy Bills Support Scheme. As these homes will be unable to receive support through the scheme for heating costs, the government will provide an additional payment of £100. This payment compensates for the rising costs of heating fuels such as heating oil.
UKIFDA, the trade body for the liquid fuel distribution industry, has met with the government to discuss the most efficient way of getting the £100 fixed payment to heating oil customers.
Given the highly competitive nature of the heating oil market, customers have the ability to purchase from a number of different distributors and outlets. Consequently, they are likely to hold multiple accounts, which makes the fixed payment distribution more challenging to deliver.
Inevitably this will take some time, so we strongly recommend that customers do not wait if they need heating oil urgently. We are working closely with the government to find a solution and ensure that heating oil households receive their £100 as soon as possible.
WHAT HAPPENS IF MY BILLS ARE INCLUDED IN MY RENT?
Landlords will benefit from the Energy Price Guarantee if they have a domestic electricity or gas contract with a licensed electricity or gas supplier. They should reflect this in the price they charge from 1 October.
Similarly, if your landlord receives the Energy Bills Support Scheme, they should pass it on to tenants. Your landlord should pass on the discount irrespective of how you pay for your energy use.
If your landlord has a non-domestic contract, they will benefit from the Energy Bill Relief Scheme and should still pass the savings on to you.
