Find out how to reduce your heating oil bill and avoid fuel poverty! We explore how to make it last longer, and also how to pay less: understand the latest heating oil price trends; get tips on energy efficiency; and get a decent service at a reasonable price.
The price of 28-second Kerosene, or home heating oil as it is more commonly known, can vary enormously. Sometimes you will pay more for a rapid service, but you should usually save money by shopping around.
You should read our research article, Who are you buying your domestic heating oil from? as it gives details about how uncompetitive the retail buying market appears to be. Also read about Impartial voices on heating oil for perspectives on who to trust for independent oil buying advice.
When you do buy direct from a heating oil supplier, beware of the hidden credit charge they may slip in to the invoice!
In the UK, historical oil prices for home heating oil stood at 20-30p/L for many years, but a supply squeeze and unprecedented global demand sent the price to 55-65p/L over the Summer of 2008, dropping at the end of the year to under 40p/L. During 2010 to late 2014 it gradually moved back up to 55-60p/L, before crashing spectacularly as 2015 made an appearance. At just the time of year when prices would normally be spiking due to huge demand for winter top-ups, the price for a litre was instead tumbling from 55p to under 40p!
Snowy Conditions: The bad weather at the beginning of 2010 caused an oil price surge to 40-50p/L, and for a few weeks after that it settled back down to the 37-44p/L region. It's worth remembering that suppliers will move prices up during icy and snowy weather simply because of supply complications and impassable roads. To avoid problems, oil delivery companies need snow-bound home-owners to clear their access routes, as the drivers refuse to attempt delivery if they fear getting stuck in drifts or unable to get traction on icy surfaces. If you have icy conditions, use your common sense to make sure that they can get through, and you should get your oil!
Global oil pressures do fluctuate quite significantly, but during the last few months of 2010 we saw domestic prices of 41-45p/L while crude was between $80 and $90 per barrel - up until December at least when it sky-rocketed to 70p or more and with unpredictable delivery dates. The summer season eased heating oil prices, but not much below 40p/L. As the cooler autumn months rolled in, more people's minds turn to securing their winter tankful, and sure enough prices meandered up to 60p/L.
2011 and 2012 saw very little movement up or down in the price of oil for householders, as it was pegged mostly between 55 and 60 pence per litre. Even during the summer months, consumers were lucky if they could place an order at 50p/L.
After many years of the price of heating oil being driven by exchange rates and oil supply variations, everything is now dependent on Coronavirus. A crude price of $70 or so would typically translate to around 50p/L, but business mothballing and population shutdowns aroudn the world have led to a sudden collapse in global demand for oil. In the UK there was a sudden spike (up around 10p/L) in heating oil prices, presumably due to "panic buying". We certainly don't want to run out of the stuff in a crisis do we! However, as the dropping crude price take hold (roughly halving to around $25/barrel) we are now seeing heating oil dropping steadily by around 1.5p per day for a litre.
It looks like the price is going to continue falling for a month or more, so you may want to delay it a bit if you were thinking of filling up soon. However, do be wary of supplier availability! COVID-19 is putting a strain on the UK workforce, so there may well be fewer drivers available than usual; it may be worth giving your favourite supplier a call to find out if their service is affected.
It really is amazing how much the price (both crude and home heating oil) can fluctuate; from its $147/barrel peak in 2007, crude fell as far as $35 only a few months later! It is now under $90/barrel in late 2012, but has been bouncing around between $80 and $120 for the past year. Now that crude has settled at around the $85 mark, you should in theory expect the domestic rate to be around 40p/L - but that hasn't happened. Clearly there are lots of demand and supply pressures on crude oil, and home heating oil has to pay its share.
You can keep up to date on Facebook, at the Heating Oil page.
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