Oil central heating

Around 5% of homes in Great Britain use oil central heating instead of heating their homes with gas or electricity. 

Oil central heating is much more common for households in Northern Ireland, many of which are not connected to a gas grid network. 

Homes with oil central heating aren't connected to the main gas grid. 

Like LPG (liquid petroleum gas), heating oil is delivered by road and stored in a tank.

Is your oil boiler reliable? See the best oil boiler brands. 

How does oil central heating work?

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

Most condensing oil-fired boilers are floor-standing, and you can get heat-only and combi condensing oil-fired boilers. 

Most oil combi boilers have an internal hot water store to supply your hot water, rather than heating it on-demand like gas combi boilers do.

Will oil boilers be banned?

The government plans to phase-out high-carbon fossil fuel heating, including heating oil, in off-gas-grid homes. However, while its expected that the government will ban oil boilers from being installed in new build homes, a proposed ban on installing replacement oil boilers in existing homes will not be going ahead. 

The government has said that rather than ban oil boiler installations, it wants to focus on encouraging uptake of low carbon heating options in homes where a boiler has reached the end of its life.

Both the previous government and the new Labour government pledged that they would not force homeowners to rip out central heating systems that are in good working order. 

But it's worth thinking ahead to what you might replace your oil boiler with when it's no longer working. 

Low carbon options include:

• ground source heat pump
• air source heat pump
• solar water heating (for hot water only)
• other types of electric central heating.

If a heat pump isn't practical in your home, then you could consider a high-temperature heat pump or biomass boiler instead.

How much does oil central heating cost?

The average price of kerosene was around 6.02p per kWh in September 2024, according to Sutherland Tables, which collects domestic fuel price data. 

An average 'medium energy-use' home needs around 11,500Kwh per year for heating and hot water. Heating that home with kerosene heating oil would cost around £692 per year. 

But your actual heating bill depends on:

• the size of your home
• how well it's insulated
• the efficiency of your oil boiler
• how much heating and hot water you use
• the price of your heating oil
• where you live in the UK.

Use our guide to saving money on your energy bills to see what changes you can make to keep your home cosy and keep your bills in check.

Save money on heating oil

The price of heating oil changes and is currently high. Over the last five years, the cost per litre of heating oil has been: 

• 51p in January 2020
• 32p in January 2021
• 60p in January 2022 (with a jump to 99p in July 2022)
• 73p in March 2023
• 72p in March 2024
• 62p in September 2024*

Find out more about price fluctuations and how to get the best price for heating oil.

Oil central heating pros and cons

Pros

• Oil is an efficient fuel, so you get a good return on each unit of energy
• Replacing a standard oil boiler with a more efficient modern condensing one is relatively straightforward
• You can stock-up on kerosene in advance, when the price is lower.

Cons

• Heating oil is delivered by road so there's a risk you could run out while you're waiting for a delivery. But you can get systems which monitor the oil level in your tank and automatically tell your supplier when you need a refill
• The price of heating oil fluctuates, depending on global demand
• Oil is a fossil fuel and produces carbon dioxide when it's burned, so it's not environmentally-friendly
• Installing oil central heating can be expensive and disruptive
• Oil boilers generally limit the hot-water flow rate to ensure it's as hot as it should be. This means the hot-water flow rate is lower than with a gas combi or hot-water cylinder system, and the temperature declines as more water is used
• The heating oil tank can be unsightly and needs servicing annually - find out more in our heating oil tank guide.

Can you use bio-fuel in an oil boiler?

Some industry groups are trialling the use of bio-fuel in oil boilers instead of petroleum-based kerosene. This usually comes in the form of hydrotreated vegetable oil (HVO), a combination of vegetable oils. Most oil boilers could be relatively cheaply converted to make them suitable for burning HVO instead of kerosene.

HVO can be collected as a waste product from the agriculture and food industries, such as used cooking oil, by-products of vegetable oil processing, and fatty wastes from animal industries. But supply is hard to come by, and many manufacturers of HVO do also include new or 'virgin' vegetable oils as well.  

In theory, HVO should have a lower carbon footprint than kerosene. However green groups have expressed concerns about the legitimacy of HVO's carbon footprint calculations. Vegetable oil agriculture can have devastating deforestation impacts - famously true of the palm oil industry as well as others. Alongside environmental damage, deforestation has a large and lasting impact on global carbon emissions. 

Environmental NGOs worry that a heavy global demand for 'eco-friendly' bio fuels (it is being trialled for aviation and other forms of transport as well as heating) will only lead to increased demand for vegetable oil agriculture and its surrounding environmental impacts. 

If you have an oil boiler and are looking for a swap for environmental reasons, you're probably better off preparing to replace your system with something like a heat pump in the long term. A swap to biofuels might be of interest as a short term fix, if it does become more widely available.

*Prices provided by Sutherland Tables, which collects domestic fuel price data