Heating Oil Price Guide
Living in the UK means that many of us are reliant on domestic heating oil to warm up our homes during the colder months. So, it’s understandable that consumers want to understand heating oil prices and how they fluctuate in order to secure the best domestic oil prices.
As a business that has supplied heating oil for almost 100 years, we’re well-positioned to answer some of the most common domestic fuel 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?
In March 2021, the UK heating oil prices are gradually decreasing. This is because we are experiencing milder, spring-like temperatures and the cold snap from earlier in the year has passed.
In January 2021 and for most of February, the UK heating oil prices were slowly going up. This was because of positive developments in regards to the Covid-19 vaccine and because we were experiencing colder than average temperatures.
It’s important to keep an eye on UK heating oil prices to get the best deal as the prices are ever fluctuating. After all, there are numerous factors affecting home heating oil prices.
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.
Sources: ONS and Met Office
How to compare home heating oil prices?
You can compare home heating oil prices online or by getting in touch with different providers. However, it’s not always as straightforward as finding the lowest price.
One of the biggest factors that impacts home heating oil prices is the delivery date – i.e. how quickly you need the heating oil to reach you. So, when comparing prices from different providers, make sure you’re doing so with delivery date in mind otherwise the results can vary quite significantly.
You should also feel confident that the company you’re ordering from provides exceptional customer service. Prices that are too good to be true probably are exactly that, 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.
Where to find the best domestic heating oil quotes?
The find the best domestic heating oil quotes online you can use our online quick 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
- Weather
- Global events
- Local competition
- OPEC
- Exchange Rates
- Market Sentiment
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, conflicts and political instability can all impact oil prices.
- 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.
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.
How to get the best deal on heating oil prices?
To get the best deal on heating oil prices, you need to do your research into the different prices offered by various providers, and keep an eye on the factors that may affect the price of oil.
Our top five tips on getting the best deal on heating oil prices are:
- 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 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.
Rix Petroleum serves a number of heating oil clubs across the UK and, as an extra reward for purchasing from us, we donate the savings we make on reduced transportation costs towards community projects. These can run to hundreds of pounds and so far, we’ve funded new school clothing, a church renovation project, local sports teams and a wealth of other great causes.
- 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. And, 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.
- Buy domestic oil when demand is low
As we discussed earlier, kerosene prices are cyclical, rising in the winter and dropping back in the warmer months. Therefore, buying in the summer can significantly reduce your annual heating oil bill.
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.
And 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 deal on domestic oil for your home, please get in touch with us.