Home heating systems Oil central heating

domestic oil tank

Heating oil tank can be stored above ground or underground

Homes that have oil central heating aren't connected to the main gas grid. If you live in one of the 4 million households in the UK that are not on the mains gas network, then you need to read on.

Here, we tell you what you need to know about oil central heating - including how much an oil-fired central heating system costs to run, and the pros of cons of having oil central heating. Plus find out about alternatives to heating oil.

Heating oil central heating systems

Heating oil is normally used in a ‘wet’ heating system where an oil-fired boiler heats water, which provides central heating via radiators and hot water through the taps in your home.

The main difference between mains gas and heating oil is that it is delivered by road and stored in a tank, which you may have to buy or rent from your supplier.

You can find out more about heating oil and in our full guides. 

Heat-only and combination condensing oil-fired boiler types are both available. Most oil-fired combination boilers have an internal hot water store to supply domestic hot water rather than the instantaneous heating more common in gas boilers.

Annual cost of heating oil

The average annual cost for heating and hot water using heating oil in the UK is £368 when consuming around 12,500 kWh a year.

This annual fuel cost is not based on actual fuel bills. It's derived from using the average cost of kerosene across the UK, sourced by Sutherland Tables, which collects domestic fuel pricing data. These costs (per kWh in pence) are then multiplied by the amount of kWh a medium gas energy user consumes on average in a year (12,500 kWh), as calculated by Ofgem. The price is based on data from January 2016, when oil prices tend to be a little higher than in the summer months.

Remember, this cost is just a guide to help you compare costs of different types of fuel. There are a number of factors that affect energy bills, including the age of a house and insulation, the efficiency of a hot water and heating system, and where you are in the UK.

If you're worried about your energy bills, use our free switching service, Which? Switch, to find the best deal for you.

Pros of oil central heating

Oil has typically been a more expensive fuel, with sudden spikes caused by surges in demand, weather conditions and political unrest. However, since 2014 the price has been falling - in January 2015 the price was 46p per litre and in January 2016 the price was 32p - making it one of the cheaper ways to heat your home. 

Oil is a highly efficient fuel, so you get a good return on every unit of energy. Modern condensing boilers, which use hot flue gases that are wasted in a standard boiler, now achieve efficiencies of 90% and more. Replacing a standard oil boiler with a highly efficient modern condensing boiler is relatively straightforward. See our boiler reviews for current Best Buys.

Cons of oil central heating

Although prices have been low since 2014, there is no guarantee that they won't rise again. In addition, an investigation by the Office of Fair Trading was sparked by questions around whether there was enough competition in the market after a sharp price rises in winter 2010. It concluded that the market did not need price regulation - you can read more information in our heating oil investigation page.

As oil is delivered by road there is a possibility you could run out while you wait for your next delivery. However, systems that monitor the amount of oil in your tank, which can automatically notify your supplier if you want this service, help you from avoiding this problem. There are in addition other things you can do to cut heating oil costs and avoid problems with heating oil tanks

Installing an oil central heating system from scratch can be expensive and disruptive. The storage tank can also be unsightly (although this can be resolved by going for an underground tank).

Oil boilers and heating oil tanks need servicing annually to ensure they run efficiently and last as long as they should.

Most condensing oil-fired boilers are floor standing, so you may have problems trying to find a wall-mounted model. They will also need to be plumbed in to allow acidic condensate liquid to drain away.

Oil boilers generally limit the hot water flow rate to ensure the water is as hot as it should be, meaning the hot water flow rate is lower than a gas combi or hot water cylinder system and that the hot water temperature will decline as more water is used.

As a fossil fuel, oil produces carbon dioxide when it’s burned and can’t be considered a clean source of energy.

Heating oil alternatives

You could consider installing a renewable heating system, such as water-heating solar thermal panels or a heat pump. An incentive scheme called the Renewable Heat Incentive was launched in 2013 - this pays householders for generating their own heat.

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