The average price of a litre of heating oil dropped 29% over the first three months of the year. It now costs 36p per litre, on average, making it the cheapest fuel to use to heat your home.*
A typical heating oil tank holds between 1,000 and 2,000 litres. So if you top up your 1,000-litre tank from 10% to 90% full, you could save around £120 compared with three months ago.
With many of us spending more time at home during the lockdown – and therefore using more heating and hot water – your oil supplies might be decreasing faster than usual. So the lower prices are good news if you need to buy.
But take care before you rush for a cheap rate. Heating oil orders are at double the level usually seen in spring, and suppliers are working hard to keep up.
Thinking of stocking up while heating oil prices are low? First read our tips for getting the best heating oil price.
*The average prices for kerosene heating oil are from Sutherland Tables, which collects comparative home heating costs from the UK and Republic of Ireland for each quarter of the year. The comparison for gas is with British Gas’s tariff.
Cheap heating oil
There are two main types of heating oil: kerosene or gas oil. Kerosene is more commonly used in homes and is more efficient, so it’s worth opting for this if your boiler takes either oil.
In April, the price of kerosene heating oil was 36p per litre, on average. This is 15p, or 29%, less than at the beginning of the year.
Heating oil price per litre
Heating oil prices were at their highest in recent years in October 2018, when a litre cost 54p, on average. The current average price is 33% cheaper.
The last time that the average price was lower was in October 2016, where it was 35p per litre.
The current price of heating oil is around 20% lower than the average over the past four years. It’s currently the cheapest way to heat your home, according to data from Sutherland Tables.
Guy Pulham, CEO of the UK and Ireland Fuel Distributors Association (UKIFDA), said: ‘[it’s] fantastic news for everyone using heating oil, as it confirms that this form of energy is the cheapest right now.
‘The price of oil has continued to fall over the last quarter, and the cost of home heating using oil is now cheaper than gas heating, regardless of the type of property you live in or whether you have a conventional or condensing boiler.’
The pricing data, from Sutherland Tables, is quarterly. So April figures are an average across February, March and April.
Why is heating oil cheap?
The price of heating oil often fluctuates. It’s tied to the price of crude oil, which can be affected by factors including global production, political unrest and the weather.
The current low prices in the UK are caused by global oil demand plummeting to 20-year lows as a result of lockdowns across the world for coronavirus.
Since it’s uncertain what will happen over the coming weeks, it’s tricky to predict how prices will be affected.
Should I stock up while heating oil prices are low?
Cheap rates mean that customers can currently get more for their money, on average, than they have over the past three years.
The UKIFDA said that households who use oil for heating can ‘reap the rewards of using liquid fuel as their heating source and to consider how they can benefit from these low prices’.
However, it’s important not to panic-buy heating oil. As we saw in supermarkets, a sudden rush on a product can have an impact on its availability for others who need it.
Suppliers can be affected by staff sickness or those who are self-isolating, so deliveries may be slower than usual. Heating oil order levels were double the seasonal norm in March, as many people are working from home or self-isolating, according to the UKIFDA.
Its website said: ‘core staff continue to work very hard in the face of unprecedented demand – there really is no need for panic buying’.
It advises customers to:
- Be patient. Tell your supplier when you will run out, to help it prioritise deliveries.
- Explain your circumstances. If you’re self-isolating, in a vulnerable group according to the government, or aged over 70, it’s helpful for your supplier to be aware.
- Don’t order if you don’t need oil. This will help spread out demand.
Some suppliers are extending their Cold Weather Priority Scheme to those who are aged over 70 (usually it’s 75+) or self-isolating owing to COVID-19. Check with your supplier whether it’s offering this.
Heating oil distributors have also been working extra hours to deliver oil to homes in rural communities.
But do keep an eye on the level in your tank on a regular basis. If you’re using more heating oil than usual, you’ll need to make sure you order more in enough time.
Find out more about how to maintain your heating oil tank and protect yourself against oil theft.
How to save money on heating oil
Buying heating oil in bulk is usually cheaper than buying small amounts. You can club together with people in your area or join an existing heating oil club so that you can buy larger quantities together to save money.
If you need a fast delivery because your tank is running low, it’s likely to cost more. Plan ahead as much as possible, so you can get the best rates.
This will give you time to compare prices from different companies. It’s worth getting quotes from different local companies regularly, as then you will know what typical prices look like and can spot when they change. You’ll also have the knowledge to negotiate a better price.
The UKIFDA has a list of accredited fuel suppliers who have signed up to its code of practice and give customers access to alternative dispute resolution (ADR) if they need it.
When you’ve found a supplier and price you’re happy with, find out about the payment options. Some companies charge if you pay by credit card, while others will lock you into a contract if you pay by direct debit.
A contract can be helpful if the company also monitors how much oil is in your tank and tells you when it needs refilling. But it stops you from shopping around.
Find out more about getting the best price for heating oil.
Five ways to cut your energy bills
Besides the tips above to cut your heating oil costs, try these five to keep your heating bills in check without feeling chilly when temperatures drop:
- Upgrade your heating controls – accurately controlling the temperature around your home helps reduce wasted energy. For example, you can keep your most-used rooms warmer, and turn the heating down 1°C in rooms you use less. Find out whether a smart thermostat would suit you.
- Cut draughts – check windows, doors, chimneys, fireplaces and lofts for heat escaping, and use our draught-proofing tips to keep the heat in.
- Fit insulation in your loft, or top up existing insulation. Find out more about loft insulation.
- Install a water-efficient shower head. These keep your shower feeling powerful while cutting your hot water use.
- Get your heating oil tank serviced and check it regularly to avoid a leak.
For more money-saving tips, see 10 ways to cut your energy bills.