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Coronavirus Information

Fuel buying co-operatives

If you are based in a small village or rural community which uses oil you may be able to increase your buying power by forming a fuel buying co-operative.

Under the right circumstances you could save a considerable amount of money on your annual heating bill.

Positives

  • The overheads to deliver 5000 litres are much the same as those for a delivery of 500 litres ( minimum delivery quantity as dictated by the weights and measures act)
  • Grouping deliveries into the same area not only offers potential savings but will also cut down on the number of trucks visiting your village or town and fewer trucks mean fewer emissions.
  • By getting a number of customers together to take delivery all at the same time and sorting out all the details for payments with the order the buying group is doing some of the suppliers job for them which in turn leads to helping towards cost savings due to administration time savings being achieved.
  • A co-operative is community based with no cost to join

Drawbacks

  • Fuel distributors operate on wafer thin margins and without the genuine savings of consolidated orders to be delivered into small delivery areas on the same day it may be difficult to find any cost savings to pass on. The more widespread the delivery area the less attractive the proposition. Customers who have large tanks and are able to buy larger quantities and able to place those orders away from peak demand periods are likely to be able to buy just as well on their own if they shop around.
  • At times of peak demand it can be difficult to accommodate large orders and priority will inevitably given to individual customers.
  • It is also important to note that oil prices can be very volatile and that quotes will differ from one day to the next so it is essential to only compare prices made for the same delivery volumes on the same day. In addition different suppliers buy on different mechanisms, some have stock and some don’t, and these will also affect pricing in different phases of the market meaning that the same suppliers will not always be the cheapest or most expensive.
  • In many cases customers who require deliveries to be made by small tankers will negate some of the savings for others who do not require this and where oil clubs charge a membership or administration fee this may be the same as or greater than the savings to be made. Some are better than others.
  • There are also concerns that not all internet based oil buying groups are genuine. Please be wise and make checks before you pay any money in advance of delivery. If in doubt, don’t

The following sites provide more information:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31881/12-593-guide-for-community-buying-groups.pdf 

http://www.oil-club.co.uk/

Remember using a local supplier for your co-operative will help the rural economy, provide work for local people and reduce carbon emissions thus protect our wonderful Ribble Valley environment.  

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