UK GOVERNMENT MUST ACT OVER UNREGULATED FUELS – MACASKILL
ALBA Depute Leader Kenny MacAskill MP has today (Wednesday) unveiled a paper on the impact of the rising cost of unregulated fuel such as fuel oil in driving up levels of fuel poverty in the north east and rural Scotland. Together with ALBA’s Cllr Leigh Wilson he is calling on the UK Government to take urgent action to address the rising cost of unregulated fuel. He has also revealed that the Scottish Government has failed to make any representations to the UK Government on unregulated fuel despite its critical importance at this time.
Speaking at a news conference in Books and Beans, 22 Belmont Street, ABERDEEN at 11:00 am Kenny MacAskill MP said:
“There are over 200,000 households in Scotland which use an unregulated fuel source such as fuel oil or bottled gas to heat their homes rather than electricity or mains gas as their primary source of heating. The families who rely on unregulated fuel are seeing prices sky rocket with the cost of fuel oil tripling over the last year.
“Yet these fuel sources are vital in many parts of Scotland especially in rural areas where access to the gas grid isn’t available. These are areas that are already suffering from the highest rates of fuel poverty and where rising charges are impoverishing many more.
“Yet they are locations where energy, whether on or offshore, and oil and gas or renewables is plentiful. Scottish households and communities are fuel poor in Energy Rich Scotland which is why these fuel sources must be regulated.”
Also speaking at the news conference Cllr Leigh Wilson, ALBA councillor for the Mearns ward on Aberdeenshire Council said:
“ Fuel poverty is at record levels in the North East of Scotland, the Highlands and across rural communities who rely more heavily on unregulated fuel sources like heating oil. While the national rate of fuel poverty is one in three households the level is on the rise in parts of the north east and rural Scotland with Aberdeen at 37%, Dundee 44%, Moray 46%, Highland 47% and the Western Isles 57%.
“With many of those households relying on unregulated fuel as their main energy source it is time for the Scottish and UK Governments to act.”
Mr MacAskill continued:
“As the cost of unregulated fuel skyrockets plunging more and more people into fuel poverty it has emerged, in a recent parliamentary written answer to me, from the UK Treasury that the Scottish Government has yet to demand the powers over unregulated fuel be devolved to the Scottish Parliament. It is astonishing that in the face of the cost of living crisis the Scottish Government is failing to stand up for Scottish families.
Concluding Kenny MacAskill MP said:
“The UK Government are turning their backs on the fuel poor in rural Scotland while the UK’s Treasury coffers and energy security continues to benefit from Scotland’s massive energy resources.
“The UK Government must act and act now. Unregulated fuels must be brought within the scope and powers of the UK energy regulator Ofgem. The UK Government must intervene and bring forward concrete plans to regulate these unregulated fuel sources and do so without delay.”
Notes to Editors
- 17% of all dwellings which equates to 426,700 households are off the gas grid. This figure is 65% in rural areas. (Source: Scottish House Conditions Survey 2019)
- 8% of all dwellings which equates to 205,000 households have an unregulated fuel, such as heating oil, LPG or solid fuel as their “primary heating source”. (Source: Scottish House Conditions Survey 2019)
- 5% of all dwellings which equates to 125,000 households rely on heating oil as their “primary heating source” (Source: Scottish House Conditions Survey 2019)
- The cost of heating oil has tripled over the last year from 42p on 16 March 2021 to £1.25 on 16 March 2022. (Source: Boilerjuice comparison site).
- 847,000 households – more than one in three in Scotland (38%) will be spending over 10% of their income on fuel. In 14 of Scotland’s 32 Councils the rate is higher still with the Western Isles set to see fuel poverty rise to a staggering 57%.(Source: Energy Action Scotland. News (eas.org.uk)).
- The lifting of OFGEM’s energy price cap in April will see average annual household bills rise by £700 (Source: Money Saving Expert, March 2022)
Poverty Amidst Plenty
The Need For all Domestic Fuel Sources to be Regulated
Regulated and Unregulated Fuels
OFGEM currently has powers to regulate the supply of gas and electricity to domestic residences. They can cap prices as well as instruct on other aspects of provision to people’s homes.
But there are other fuel sources which remain unregulated and outwith the scope and powers of OFGEM. These include heating oil, LPG (liquefied petroleum gas), and solid fuel. These fuels are not subject to any regulation at all. OFGEM has neither remit nor powers to intervene.
Yet these are vital in many parts of Scotland especially in rural areas where access to the gas grid isn’t available. These are areas that are already suffering from the highest rates of fuel poverty and where rising charges are impoverishing many more.
Yet they are locations where energy whether on or offshore and oil and gas or renewables is plentiful. Scottish communities are fuel poor in Energy Rich Scotland which is why these fuel sources must be regulated.
Rural Communities reliant on Unregulated fuel
A Scottish House Conditions Survey in 2019 found that 17% of all homes (426,700 households) are off the gas grid. That figure was 65% in rural areas.
The survey also disclosed the following households as dependent on unregulated fuel supplies
Solid Fuel 1%
With Scotland having 2.4 million households the numbers are substantial and are in excess of 200,000 homes.
Rural Communities have higher rates of Fuel Poverty
In 2019 43% of households in remote rural areas in Scotland were estimated to be in fuel poverty, with 29% of rural households overall. The overall rate in urban areas was 24%.
Households with gas central heating had the lowest levels of fuel poverty at 22% in 2019, in comparison to 28% of those using heating oil, 43% electric and 31% other heating types.
Worsening that between 2018 and 2019, rates of fuel poverty increased in remote rural areas (from 33% to 43%), increasing the gap when comparing overall urban (24%) to overall rural areas (29%).
Similarly, levels of extreme fuel poverty increased in remote rural areas (from 23% to 33%), meaning that extreme fuel poverty rates in rural areas (19%) were higher than in urban areas (11%).
A survey by Energy Action Scotland disclosed the following rates of fuel poverty across Scotland:
Scottish Fuel Poverty Rising
Fuel poverty in Scotland is rising exponentially. It’s defined in Scotland as a household that has fuel costs (necessary to meet the requisite temperature, number of hours, as well as other reasonable fuel needs) are more than 10% of the household’s net income and after deducting heating costs, the household’s remaining income is not enough to maintain an acceptable standard of living.
Fuel poverty in Scotland is set to break the 50% barrier with highland, island and rural communities suffering the most. Scottish Government figures show that a further 211,000 households are likely to be living in fuel poverty in the coming months, this being an increase of 43% compared to 2019.
It will impact hardest on households relying on unregulated fuels and that will impact hard on rural areas. The cost of heating oil has tripled over the last year meaning fuel poverty is rising in rural areas. The Western Isles could see fuel poverty increase to 57%.
The rising cost of living coupled with skyrocketing energy costs mean that for many it is a choice of eating or heating their homes.
Some European countries with communities that rely on fuels such as oil, LPG, solid fuel and biofuel have either introduced legislation, or they compensate customers for the cost of those fuels and have increased subsidies to help households with energy prices.
Unregulated fuels which are vital in many rural parts of Scotland and where fuel poverty is highest must therefore be regulated. OFGEM must have the same powers to cap these prices and address supply issues as they do with gas and electricity.