ASA Adjudication on Firmus Energy (Supply) Ltd

Ad

A radio ad on Q102FM for Firmus Energy, suppliers of natural gas, stated "... Switch from oil or coal to natural gas and produce up to 30% less CO2 emissions, it's also around 10% cheaper to run so you'll save a few quid too ..."

Issue

1. The Northern Ireland Oil Federation challenged whether the claim "about 10% cheaper to run" could be substantiated because they believed that an independent report showed oil was cheaper in every case.

2. The ASA challenged whether the claim "switch from oil or coal to natural gas and produce up to 30% less CO2 emissions" could be substantiated.

BCAP Radio Code

Response

1. Firmus Energy (Firmus) said they were a relatively new company and had tracked weekly and bi-weekly oil prices for a broad spectrum of oil distributors across their gas licence area, the North West of Northern Ireland. They conducted a survey and sampled the pence per litre cash prices of the most commonly purchased volumes of domestic oil, 500 litre and 900 litre fills, and converted those prices into a pence per kilo Watt hour (kWh) figure for the purposes of comparing oil to their own natural gas domestic tariff.

They said that, based upon their survey, the average price of home heating oil over the period January 2006 to February 2007 was the equivalent of 3.53 pence per kWh. They said that, compared to their pre-payment domestic tariff of 3.23p per kWh, the running cost of natural gas over the period was calculated to be 8.39% cheaper than oil on average, hence the claim to be "around 10% cheaper to run". Firmus said they used that 12-month benchmark as the basis for their cost comparisons against their annually reviewed tariff.

2. Firmus said the "up to 30% less CO2 emissions" claim was based on data from the Carbon Trust which identified kilograms of CO2 emitted per kWh of energy burnt. They said, on the basis of those figures, Kerosene emitted 26% more CO2 emissions than natural gas, gas/diesel oil 32% more, heavy fuel oil 37% more and coal 58% more.

The Radio Advertising Clearance Centre (RACC) confirmed they did not clear the script.

Q102FM said they had not cleared the script and had not received any supporting evidence from Firmus. They said that, because the ad arrived from an agency, they had assumed it was cleared by the RACC. Q102FM apologised for their error and said procedures were now in place to ensure that all in-house and agency ads were checked and cleared before broadcasting.

Assessment

1. Not upheld

The ASA noted that, between January 2006 and February 2007, Firmus had surveyed oil prices, throughout their gas license area in the North West of Northern Ireland, for 500 litre and 900 litre quantities of domestic Kerosene oil. We noted that, among members of the Northern Ireland Oil Federation, those quantities were the most commonly offered for purchase and, therefore, concluded that their survey accurately reflected average domestic oil prices in pence per litre. We acknowledged that, based upon their survey data, Firmus had correctly calculated the equivalent price of one litre of domestic oil as 3.53 pence per kWh.

We noted that the independent report referred to by the Northern Ireland Oil Federation showed that the running costs for domestic oil were cheaper than the running costs for Firmus natural gas. However, we also noted that the report considered oil prices for a six month period only preceding April 2007 and had calculated the cost of one litre of oil based upon purchasing a volume of 900 litres of oil only. We noted that, because the price of a single litre of oil was cheaper when a greater volume was purchased, by basing their price for a single litre of oil on purchasing 900 litres only the independent report did not fairly reflect the average pence per litre market price.

We concluded that, because Firmus had provided accurate data for a whole year that surveyed the average cost of the two most commonly offered quantities of domestic oil, the claim natural gas was "around 10% cheaper to run" was accurate and not misleading.

On this point we investigated the ad under CAP (Broadcast) Radio Advertising Standards Code section 2 rule 3 (Misleading) but did not find it in breach.

2. Not upheld

We acknowledged the report submitted by Firmus, from the Carbon Trust. The report contained a table comparing carbon emission factors. We noted those factors were taken from Annex A of UKETS (01)05 (Guidelines for the measurement and reporting of emissions in the UK Emissions Trading Scheme) and were consistent with the National Air Emission Inventory. We noted that natural gas had a carbon emission factor of 0.19 kg CO2 per kWh compared to 0.3 kg CO2 per kWh for coal and 0.24 kg CO2 per kWh for Kerosene. We understood that, on average, coal and Kerosene emitted around 30% more CO2 than natural gas. We concluded that the claim "switch from oil or coal to natural gas and produce up to 30% less CO2 emissions" was accurate and not misleading.

On this point we investigated the ad under CAP (Broadcast) Radio Advertising Standards Code section 2 rule 3 (Misleading) but did not find it in breach.

Action

No further action required.

Adjudication of the ASA Council (Broadcast)