DCC's UK LPG division under review

DCC's liquefied petroleum gas (LPG) operations in Britain are being reviewed by Britain's Competition Commission

The commission yesterday released a ruling saying that some British households are being overcharged for LPG because competition between bulk domestic suppliers is weak. It said it intended to introduce remedies to address the situation.

Dublin-based DCC is the second-largest player in the UK domestic bulk LPG market through its Flogas subsidiary, with a market share of about 21 per cent.

The commission yesterday asked for submissions on possible remedies.

Analysts said the Irish group was unlikely to be affected by the ruling and any remedies imposed.

"This is a very small part of their business and we don't expect the proposed remedies to have any material impact on the group's profit," said John Sheehan, an analyst at NCB.

He said the remedies were likely to be behavioural rather than structural, which would limit their impact.

A spokesman for DCC agreed, saying the division was only a small part of the group's business and that, if anything, Flogas was helping competition in the market.

Calor is the largest player, with Shell and BP also operating in the sector.

LPG is used by about 150,000 households in the UK, mostly in rural areas, for heating and cooking. The average annual LPG bill, according to the commission is about £800 (€1,178), compared with the an average estimate from the industry regulator of £390 for a mains gas bill.

Flogas is part of DCC's energy business, which accounts for almost 40 per cent of the group's overall profit.