Heating Oil Price Guide
Living in the UK means that many of us are reliant on heating oil to warm up our homes during the colder months. So, naturally, consumers want to understand heating oil prices and how they fluctuate in order to secure the best UK heating oil prices all year long.
As a business that has supplied heating oil for almost 100 years, we’re well-positioned to answer some of the most common heating oil price questions for you. In this complete guide, you’ll find the answer to the following questions:
Are UK heating oil prices going up or down?
Since December 2021, UK heating oil prices had an upward trend. According to the Office for National Statistics, the average heating oil price was 61.406 pence in December 2021 and, just three months later, this rose by 64% to 100.989 pence in March 2022. This steep increase is due to two key factors:
1. Rising wholesale costs of oil, due to demand outweighing supply.
2. The Russian invasion of Ukraine, disrupting oil supply from Russia, the world's third-largest oil producer.
It’s important to keep an eye on UK heating oil prices to get the best deal as the prices are ever fluctuating.
What is the cheapest month to buy heating oil?
Typically, the cheapest months to buy heating oil are the summer months – so June, July and August.
In the UK, demand for central heating oil is generally highest from October to March, as these are the coldest months. This increase in demand often puts a strain on supply, and as a result, heating oil prices tend to rise.
In the summertime, when demand is typically at its lowest, the prices tend to fall. So, although it might sound counterintuitive to buy winter fuel during the hottest months, it can lead to the best deals.
For tips on securing the best oil prices in any season, read our dedicated guide.
When to buy home heating oil?
Keeping an eye on UK heating oil prices and avoiding last-minute orders gives you the best chance of securing cheap home heating oil. Prices fluctuate throughout the year, so we wouldn’t recommend relying on seasonality alone. Take a look at our complete guide on the best time to buy heating oil for more advice.
Who has the best heating oil prices?
You can do an oil prices comparison by getting in touch with different home heating oil suppliers. However, it’s not always as straightforward as finding the lowest price.
One of the biggest factors that impacts the cost of heating oil is the delivery date – i.e. how quickly you need the heating oil to reach you. So, when comparing prices from different suppliers, make sure you’re doing so with a delivery date in mind otherwise the results can vary quite significantly.
To find the best cheap heating oil prices online you can use our online instant quote tool. Or, for an up-to-date competitive price, call your local Rix depot to speak to a member of our team who will be more than happy to help.
What factors affect heating oil prices?
Many factors affect heating oil prices, including:
- Supply and demand of heating oil
- Delivery dates
- Global events
- Conflict and war
- Local competition
- Exchange Rates
- Market Sentiment
- Cost of Crude Oil
Carry on reading to learn about how these factors affect heating oil prices:
- Supply and Demand: The supply and demand of heating oil fluctuates throughout the year, in large part due to changes in weather but also due to changing consumer habits and large-scale events. With more supply than demand, home heating oil prices fall. With more demand than supply, home heating oil prices rise.
- Delivery Dates: Delivery dates is generally one of the most influential factors when it comes to price you pay for heating oil. Typically, if you order your heating oil and need a quick delivery, you should expect to pay more. If you can, its best to plan your orders so you don't need to place any urgent deliveries.
- Weather: Expected, seasonal changes in weather is one of the most obvious factors affecting the supply and demand of heating oil. However, unexpected weather events can also impact domestic oil prices. Intense weather, like storms or heavy snowfall, can delay delivery times and increase delivery costs.
- Global Events: As we’ve seen in 2020 with Coronavirus, significant events can seriously impact the supply and demand for crude oil, and subsequently influence the price of domestic heating oil. Events like recessions and political instability can all impact oil prices.
- Conflict and war: Conflict and war can impact the price of oil, especially if the conflict takes place in oil producing countries. We saw this happen when Russia invaded Ukraine in early 2022. Russia is the world's third-largest producer of oil and many countries who import oil from Russia imposed sanctions on the nation, essentially restricting the supply of oil without a reduction in demand.
- Local Competition: Where there are many local companies in a market place, some heating oil suppliers will try to undercut their competitors. However, beware that a penny or two off the price per litre of kerosene has to be recovered elsewhere in the business, often leading to slow delivery times and poor customer service.
- OPEC: The Organisation of the Petroleum Exporting Countries (OPEC) is a group of 13 member countries, many of which are the largest oil-producing and oil-exporting countries in the world. The decisions and policies they make can impact the price of crude oil and, consequently, domestic oil prices.
- Exchange Rates: Much of the UK’s domestic heating oil is imported from overseas. Therefore, foreign exchange rates can influence how much this imported oil costs.
- Cost of Crude Oil: Heating oil is a product of crude oil, which means that any time the price of crude oil rises, the cost of home heating oil will rise in-line with this.
How does market sentiment affect heating fuel oil prices?
Market sentiment is best described as what oil traders believe about the future demand for oil.
If oil traders believe demand for oil will grow, thereby pushing up the price of oil, they buy up futures contracts (agreements to buy a set amount of oil on a set day for a fixed price) with the intention of selling these contracts at a higher price once that demand has been realised.
If oil traders believe demand will drop, they will sell the futures contracts they hold before the price plummets.
The problem with this is that mere belief will lead to traders buying futures and driving up the price of crude oil. As a result, heating oil prices in the UK will rise whether the perceived hike in demand for oil was real or not.
However, the opposite is also true. The belief there will be a reduction in demand for oil will cause speculators to sell futures, and the price of kerosene will fall.
Where to buy home heating oil?
You should feel confident that the supplier you’re ordering from provides exceptional customer service. When doing an oil price comparison, remember that if the price is too good to be true, it probably is, and you shouldn’t take risks with unreliable companies when it comes to something as important as home heating. At Rix, building strong connections with our local communities and providing 5-star customer service is a priority, always.
You also need to be confident that the supplier is properly regulated. Always select an FPS (Federation of Petroleum Suppliers) accredited company, like Rix Petroleum, to supply your domestic heating oil. The FPS is the trade organisation for the oil distribution industry, and accredited companies must abide by a strict code of practice or risk having their accredited status withdrawn.
Rix Petroleum is an FPS accredited business and complies with all FPS regulations.
Likewise, it’s important to check the providers you enquire with are part of the UK and Ireland Fuel Distributors Association (UKIFDA) directory, like Rix is.
How to get the best deal on heating oil prices?
We understand that the rising price of oil has made things difficult for families all over the UK. To help our customers as much as we can, we've shared our top energy saving tips and things you can do to try and save money on your heating oil. Most importantly, we advise that you research into the different prices offered by various suppliers, and keep an eye on the factors that may affect the cost of oil. Here are three of our suggestions for getting the best deal on heating oil prices:
1. Bulk buy heating oil
Generally, the more heating oil you buy in one go, the cheaper it will be. Not only will you save money on the price of the heating oil, but you’ll cut down delivery costs, too.
If your heating oil tank isn’t big enough to safely store the amount of oil you’d like to order, join a community oil buying scheme. Heating oil clubs are popular in villages and other areas where a high number of residents use kerosene as their primary source of fuel.
By combining individual fuel requirements into one order, each member benefits from a reduction in the kerosene price per litre due to bulk buying. This can lead to worthwhile savings, particularly when ordering in the summertime.
2. Plan ahead of time
It’s important to plan ahead of time where ever possible, especially in anticipation for peak periods like Christmas and the New Year. A last-minute emergency oil delivery will be costly because it comes at the time of most demand. Plus, it’s the time when fuel suppliers are working their hardest to fulfil heating oil orders. This means you might not get your emergency oil delivery in time, leaving you without heat when you need it most. With this in mind, be sure to regularly monitor your oil tank so you know when you need to order next.
3. Buy domestic oil when demand is low
As we discussed earlier, kerosene prices are cyclical, typically rising in the winter and dropping back in the warmer months. Therefore, buying in the summer can significantly reduce your annual energy bills.
But it’s not just getting the best price for heating oil that makes topping up in summer a great idea. Delivery is quicker and, because you’re not competing with the winter hoards, you can usually choose a time convenient to you.
If you’re worried about the fuel deteriorating, don’t be. Stored safely in a secure oil tank, home heating oil will easily last until winter.
At Rix, we work hard to offer our customers the best deals on heating fuel oil prices without compromising on quality or customer service. To secure the best oil heating price for your home, please get in touch with us. Or, to learn more about our straight-forward heating oil delivery service, please read our step-by-step guide.