What Martin got wrong: Part TWO

Martin Lewis prides himself on his stats and figures. When he is being the financial genius that he is then you cannot fail to be impressed at the figures that roll off is tongue with complete confidence – that TV programme last Friday was an insight into that.  Usually, hardly taking a breath, he adds all the caveats too. So what about this: 

“This is our home heating oil cost-cutting system, to ensure you’re not missing out on key moves to cut your bills. Some could save £50-£100 on an average annual bill of £1,400.”

What on earth does that even mean? What is that based on, where are your workings Martin, how many litres is that related to, what number of deliveries and where are the caveats? That stat is meaningless and I will try and explain:

  • if someone is buying on their own in a fairly average, uninformed manner and their annual cost is £1400 and they switched to buying with the power of the group, then they should expect to be saving 5-10%. So £70-140 per annum
  • if, however, that figure of £1400 were someone paying for their OIL via an auto-fill, direct debit scheme with a single supplier, then I would expect to find that person annual savings of over £300

I could go on, but that’s the point: without knowing what that figure relates to it is impossible to actually assess what could be saved. It is so much more complex than this extremely basic attempt to explain it is making out. A simple case of misinformation – worrying isn’t it that Martin could get this so badly wrong.

What type of OIL are you using? This is what we have been given on this critical topic:

“You can get two main types of heating oil – kerosene or gas oil. Which you need is determined by the type of boiler you have. Kerosene is most commonly used in homes and is known to be more efficient, so if your boiler takes either oil, it’s usually worth going for this one.”

Getting the right fuel is critical. Kerosene is Heating OIL. Gas OIL is Red Diesel. It is possible to heat your home with both, but less than 1% of the 1.5 million homes that use OIL to heat their homes use Gas OIL. It is NOT irrelevant because Gas OIL is the fuel of farms and the entire agricultural system. However, making the point that if your boiler can use either is irrelevant. Almost no boilers can use both, without some form of engineering work to switch the use over. Probably would have been a great idea to ensure that nobody just switched fuel without checking this. As I said getting the right fuel is critical, right? But then so is getting the little things right in an article and given this article tells us the suppliers can save on: “petrol by not having to make multiple trips to the same area”, when no one ever heard of a delivery truck running on anything other than diesel, I question every single word.

Heating OIL newbies: for people that are new to Heating OIL it is extremely difficult to get used to because of the complexity of this energy business – Martin is proving that before our eyes. He mentions that they should “ask the old tenants”. I am assuming that was meant to say previous residents – tenants, owners, etc. However, that only works if the previous OIL buyer in that house knew what they were doing. If, at worst, they were committed to an auto-fill, direct debit scheme then let’s hope they don’t ask them! Anyway, rather than explain to the “newbies” the real basics, this is suggested: “if you’re a newbie to heating oil, you’ll find the cheapest suppliers using the steps below”. But of course, I have already covered in Part ONE that the chances are some of the steps suggested won’t work. Therefore, the inaccuracies of the step-by-step will have unintended consequences. The article tries to make it clear that: It’s important to note we’re not suggesting you just buy from these sites” when listing the links and effectively giving those links the stamp of approval. But, imagine you have gone through some of the steps, searched the links and nothing appears to work. What do you do in your desperation for OIL when you land on one of those links that looks like it can solve your problem? Isn’t it obvious they will just buy it from them because they are so confused? I have covered at length in other posts why Boilerjuice has an opaque, unethical business model which is appallingly bad for the entire industry and, given we consistently annihilate their prices, not one of their claims is to be trusted. So by leading both “newbies” and experienced buyers to be seduced by their impressive site and unfounded claims of savings, Martin Lewis has sent his loyal, dedicated supporters right into their lair. Bizarre, unintended consequences. 

Wholesale prices! So this is when it really does become Biblical. I believe it was in Matthew 15:13-14 where Jesus was quoted as using the phrase of “the blind leading the blind”. We have reached that deeply concerning level:

“Industry insiders say to make a profit, suppliers typically add a minimum of 4p/litre onto the wholesale price they pay. If you’re anywhere near this, you’ve got a good price. There’s no easy way to get wholesale prices (we’re onto it) but the Department of Energy & Climate Change publishes a quarterly report which may help.”

Believe me they are NOT on it! And even if they were, what on earth does that sentence even mean? I know what Martin thinks it means, but he has mashed up so many different factors and forced them into two bewilderingly naive sentences, so it actually means nothing. No doubt the uninitiated are probably very impressed by it, but what good is that if it is simply gobbledygook? So what does he do to really give the article some gravity…he turns to DECC. Now it is a simple fact that DECC know next to nothing about Heating OIL – and they won’t be told. But I am happy to be proved wrong, so please do go and click on the link to the DECC report mentioned: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/267320/qep_december_2013.pdf and if you can find the information you need in the latest report – which is not only already out of date as soon as it is published but also a vast 88 pages long – as to what a wholesale price is and what that knowledge would do you for you, then you are one very smart cookie.

I used to wonder if Martin could actually walk on water. However, now I know. The “Cheap Heating OIL” article that those at MSE Towers have launched with such pride this week is so bad that they should pull it and let it sink without a trace.

Rather depressingly I still haven’t finished yet: Part THREE covers something that is even worse.