Heating Oil Prices | Domestic Oil & Kerosene Prices

UK Heating Oil Market

One of the questions we are most commonly asked by customers is: when is the right time to buy heating oil?

Having some inside knowledge/information may help you make significant savings if you are able to buy at the right time. Unfortunately, we cannot predict geopolitical issues that may crop up and alter prices. However, the following information should give you a good indication of when the best time would be to purchase your heating oil.

The price you pay for your heating oil is influenced by a number of factors. Various factors have an impact on oil prices at international, national and regional levels and will all contribute to the price that you pay to heat your home.

The good news for our customers is that our network of heating oil suppliers always offer their cheapest oil prices possible on our website every single day of the week - including weekends.

The domestic heating oil market in the UK is extremely volatile. By timing your order right - you could make large savings on your annual heating oil bills, but unfortunately it is almost impossible to predict when the right time to buy is!  For example, heating oil prices rose by over 4 pence per litre in just 1 day in September 2019, due to an attack on a Saudi oil facility. While they also crashed in Spring 2020 due to decreased global demand due to national lockdowns caused by the Covid-19 pandemic and over-supply in the market as Opec were unable to reach an agreement to cut output. February 2022 saw unprecedented global price increases due to the Russian invasion of Ukraine, with daily rises of over 10ppl recorded - rises which would typically take a number of months to take effect.
 
Domestic oil prices vary throughout the UK, but are typically around 70 pence per litre in Q1 2024. Heating oil prices across the UK are still very attractive compared to many other forms of energy/home heating.

One other important point to remember is that oil is traded in dollars - even if the price of crude oil drops, if the sterling exchange rate is poor vs the dollar - end user prices in the UK may not reflect the falling barrel price. 


Heating Oil Prices by UK Region

The graph below provides an illustration of heating oil price movements throughout various regions in the UK - you can compare your region against the UK average price and other regions of the UK.

Please note these prices reflect the price in a single postcode. For a live price, please use our Quick Quote box on the right hand side of this page.

Simply tick the regions you wish to compare and select the time frame from the drop down list and click apply - the graph will then automatically update to display the relevant data.

The prices below are in £'s for 500 litres and include UK VAT of 5%.

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Heating Oil Prices 2024

The UK average 500 litre rate can be viewed in the graph above.  Heating oil prices since 2022 have been extremely volatile due to the Russian invasion of Ukraine and remain higher than they have been prior to the war.

What factors affect the price of heating oil?

ValueOils.com monitor heating oil price movements on a daily basis and note the factors that often play a key role in influencing prices. Some of these can be predicted to a degree, while other geopolitical factors are often hard to predict. The popular theory for UK consumers is that weather is the main (or only) influence on heating oil prices - this is incorrect. Here are some of the key factors to consider when you are buying heating oil: 

Season

Winter months are typically more expensive than the summer months due to the rise in demand across Europe & North America. In contrast, the summer months of June and July will usually provide the lowest rates, but will not always necessarily be the case.

Weather

As the temperature drops and weather conditions worsen, the demand for oil will increase locally as customers will turn their heating on for longer periods. Extreme weather or unseasonal/freak weather can also significantly influence the logistical costs of distribution for oil suppliers.  This will normally only affect prices at a local level and only in the short term.

Supply

This falls into 3 categories which can all influence heating oil prices:

1. Global

The global supply of kerosene and the price of crude oil will impact on the price of heating oil. If there is a global production decrease or shortage in supply and the level of demand remains consistent, the price in the UK is likely to increase, while the reverse is also true.
Geopolitical factors and civil unrest in OPEC countries (or neighbouring countries) in the Middle East, Southeast Asia, North and West Africa, and South America can often lead to concerns over supply and result in price increases. The same could also be said for other large producers including the USA and Russia. Decreases also follow when political circumstances settle down and production resumes. Recent examples include Libya and previously the war in Iraq whereby both countries witnessed oil prices spike and drop.

2. National

The national supply and demand for kerosene will impact the price. If there is a regional issue hindering supply e.g. weather conditions, the price can temporarily rise, this issue is particularly prevalent in Northern Ireland where oil is shipped in and storms can prevent the large oil tankers from docking.  At a local level, the price can vary depending on the number of suppliers concentrated in the area and their access to wholesale stock, or indeed how effectively they purchase their fuel oil on contract. In addition, kerosene that is used widely in the UK for heating oil, is also virtually the same product used to fuel aircraft. Therefore, if the air travel industry is buoyant - demand for kerosene remains high. Similarly, kerosene is used in producing ultra-low sulphur diesel and again when demand for ULSD is high, this impacts on kerosene demand.

3. Local

Local supply prices are very interesting and will generally vary depending on where a supplier is located in relation to a refinery or major storage facilities. The cost of product collection either ex-rack from the terminal or in haulage to the supplier’s depot for storage and then the cost of delivery to your home will impact on the price paid. Rural areas can often be slightly more expensive for fuel than urban areas, but not always. The high cost of road diesel can impact upon the delivered price of fuel. Local supplier competition is always fiercest during the summer months when local demand collapses due to warm weather. This can be an ideal time to buy and to stock up for winter. Indeed, some more inaccessible places such as the Highland of Scotland can only receive deliveries during non-winter months and must buy fuel during summer. During the wet and stormy but relatively mild winter of 2014/15 and 2015/16, prices actually fell in the UK. The fierce competition between local Northern Ireland Oil suppliers actually drove end user prices lower than usual as they battled for market share. Similar local competition impacted the South East of England and the Midlands.

Currency Exchange Rates

As oil is traded in US Dollars, the exchange rate between US$ and UK£ can have a huge bearing on the final price that we pay locally in the UK. If the UK£ strengthens against the US$, generally oil becomes cheaper and the reverse is also true. As currencies are impacted by world economic and political events, data and news around the world quickly feeds into exchange rates and immediately impacts the price of oil and other commodities.

Supplier Stock Levels

World oil market prices fluctuate throughout each day. The price that a supplier is charging may change due to their purchasing contracts, current stock in tanks, the price change on a given day and outstanding order commitments. These factors all impact the selling price that a local supplier can offer to customers. However, given the considerably high price of stockpiling fuel, local suppliers are no longer keen to hold large stocks due to cash flow implications and price volatility.

Order Quantity

In many parts of the UK, the quantity of fuel that you order for your oil tank will influence the pence per litre rate that you will pay. If a supplier is able to deliver a larger volume to your tank, typically the cost of delivery will be less. In various regions of the UK and in N.I. - many oil suppliers have now reduced the minimum delivery quantity to 300 litres. This is possible due to new electronic metering systems on modern road tankers.

Heating oil users across the UK find our regional price trend guide convenient for gauging the average price trends of heating oil throughout the year. We continue to monitor the average cost of 1000 litres each month and hopefully this will assist you in determining the right time to buy your fuel. You can also check out our blog and see the factors to consider when purchasing your oil in greater detail. Don't forget that having your boiler regularly serviced or using a fuel additive to ensure more efficient combustion in your boiler can also save you money on your fuel bills.

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