FAQ on the application of the Domestic Bulk LPG Order by bigbro22


									     Frequently asked questions on the application of the Domestic
        Bulk Liquefied Petroleum Gas Market Investigation Order

This document was published on 13 October 2008. It is not part of the Domestic Bulk
Liquefied Petroleum Gas Market Investigation Order (the Order) and does not have any legal
force or effect but is intended as a guide for customers to the main features of the Order as it
affects them. For more detailed information the Explanatory Note to the Order should be

1.     What is the Order and how do I know if the Order applies to me?

From 13 April 2009 the Order will apply to all suppliers of bulk LPG for domestic use. If you
are a customer of an LPG supplier who fills a tank to which your household is connected,
then the Order sets out a number of provisions that apply when you wish to switch supplier.
However, if your tank is shared with others, a situation that we refer to as a ‘metered estate’,
you should see if questions 9, 10 or 11 below are more applicable to your situation.

2.     I think that the Order applies to me, how do I switch supplier?

If you want to switch supplier then you should contact both your existing supplier and the
new supplier in writing to request that your existing contract is terminated. A new supplier is
not obliged to accept a new customer and they may have any number of reasons why they
cannot offer LPG supply to a particular customer. For that reason it would be sensible to
check with a new supplier to check if they might be interested in supplying you before you
write to them and your existing supplier asking for your contract to be terminated (for
example, not all suppliers will supply bulk LPG to your area).

3.     I want to switch supplier but I have signed a contract with my existing
       supplier. Can I switch anyway?

Your contract with your existing LPG supplier is a legally binding document. However, the
Order sets out some limitations on the maximum length of any terms a supplier may use to
restrict a customer from switching supplier. Where a contract provides for a period of
exclusivity that period shall not exceed two years. In addition, a contract shall not require a
notice period for termination greater than 42 days. These maximum periods apply to all
contracts between bulk LPG suppliers and their customers of bulk LPG. For example, if you
signed a contract on 1 January 2008 and it states that you are required to continue to
purchase LPG from that supplier until 31 December 2011 (four years) the Order provides for
you to obtain bulk LPG from an alternative supplier anytime after 31 December 2010 (two
years after signing) after you have given notice to your supplier that you want to change

4.     How do I find out about other suppliers in my area?

Your existing supplier is required by the Order to provide information to you on how you can
switch supplier and refer you to the contact details for the LPG industry trade association.
The industry trade association will have a list of its members, the areas of the UK they
supply and their contact details. Currently the industry association is UKLPG and can be
contacted through their website www.uklpg.org.

5.     What will happen to my tank if I switch supplier?

The Order assumes that your existing supplier legally owns your tank because most tanks in
the UK are owned by suppliers due to safety requirements. Where this is the case and you
terminate your contract, you will in most cases want your new supplier to take ownership and
responsibility for the tank. When you write to your existing supplier that you wish to terminate
your contract you should also tell them that you want the tank to transfer to the new supplier.
You should be careful not to only ask for your tank to be transferred as it is more important
that you clearly state that you want to terminate your contract. If you want your old tank to be
taken away then you should ask your existing supplier to do this in your written request to
terminate your contract.

You cannot oblige a new supplier to buy or supply bulk LPG to a tank that you or your
existing supplier owns if they do not want to. It might be that they prefer only to fill tanks that
they have installed. If that is the case then the existing supplier will need to remove its tank
before the new supplier can install its own (if you own the tank and or the service pipework
that connects the tank to the house, you will have to negotiate with the new supplier to either
remove it or purchase it from you at whatever price you agree). If your new supplier does
want to buy the tank from your existing supplier then your existing supplier must sell it to
them. The Order contains a number of detailed provisions on how suppliers must interact
with each other when a customer wishes to switch supplier, these are discussed in detail in
the Explanatory Note.

6.     How much will it cost me to switch supplier?

Where a customer is not covered by an exclusivity period then there should be no charges
payable to their existing supplier. The Order prevents an existing supplier from imposing any
charges on its customers for transferring or uplifting a tank or for the value of service
pipework as a result of a customer wanting to terminate their contract. However, if a contract
has a period of exclusivity that has not yet ended then a contract may provide that some
reasonable termination charges are payable.

A new supplier may have a number of costs that are associated with obtaining a new
customer. Some suppliers may wish to pass-on those costs at the time they first contract
with their new customer (either as part of the LPG unit price or as a stand-alone change) and
or impose a period of exclusivity to allow them to recover the costs of placing a new tank or
replacing service pipework. How much these costs are and how they are passed on is a
matter of negotiation between a customer and the new supplier and they are not restricted
by the Order other than any period of exclusivity being limited to two years. It might be that
different suppliers will charge different amounts for these costs and some customers may
benefit from evaluating their options with different suppliers.

7.     How long will it take to switch supplier once I have contacted a new
       supplier and do I need to tell my existing supplier?

You can tell either or both of your new supplier and existing supplier that you want to
terminate your existing contract, although we recommend that you write to both suppliers.
Once a supplier has received your letter that you want to terminate your contract the Order
requires that the tank is transferred within 28 days. If a new tank is being installed by a new
supplier then it might take up to 42 days before the new agreement is in place. Where a new
tank is being put into a new position, then the time taken to undertake related earthworks are
not included within the time limits.

8.     If there is an emergency who do I call?

In case of an emergency, you should contact the emergency telephone numbers that are
located on your tank.

9.     I live on an estate but I have my own ‘mini-bulk’ tank.

The Competition Commission (the CC) has been careful to define a ‘metered estate’ as a
situation where a customer shares their tank with others. If you have a mini-bulk tank that
only supplies your house and you have a contract with an LPG supplier, then the Order will
apply to your situation and you can request that your tank is transferred to a new supplier.

10.    I am a customer of an LPG supplier but I share my LPG tank with my
       neighbours and we each have a meter to our house, will the Order apply
       to me?

No. The Order will not apply to persons that share a tank on what we have called a ‘metered
estate’. The CC is currently preparing another Order that will apply specifically to persons
that share a tank or a number of tanks with their neighbours. This will be published early in

11.    The owner of my leisure park buys bulk LPG and sells it to the leisure
       park residents, including me, which Order will apply to me?

The CC was tasked with investigating the suppliers of LPG and the relationships they have
with their customers. It is a legally different situation where an intermediary purchases LPG
and then sells that gas on to others. This market has not been investigated by the CC.
Neither the Order nor the Order that will apply to the supply of bulk LPG to persons residing
on a ‘metered estate’ will apply to leisure park residents that have an intermediary
purchasing the bulk LPG from LPG suppliers.


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