Watchdog slams UK's LPG market

Households are being overcharged for liquefied petroleum gas because of limited levels of competition in the market, a watchdog has found.

Following its investigation, the Competition Commission said it is considering ways to rectify the situation, including the possibility of allowing customers to own their gas tanks and the standardising of the process for switching supplier.

Some 150,000 households, mostly in rural areas, depend on bulk delivery of liquefied petroleum gas (LPG) by truck, because they are not on the piped gas network. The LPG, stored in tanks at their homes, is used for household heating, cooking and the heating of water.

Peter Freeman, who chaired the inquiry at the Competition Commission, said: "Customers face a number of hurdles in obtaining a quote from another supplier, let alone the best deal, and it is necessary to change tanks when a customer switches supplier.

"The effect of all this is to limit competition between suppliers, and discourage entry and expansion, leading to higher prices for most consumers."

The UK's biggest LPG suppliers and distributors include Dutch-owned Calor, BP and Royal Dutch Shell. Calor has about 48 per cent of the market.