Energy Guides

Heating oil prices

Wednesday, 24 February 2010

By Garnet Roach - garnet@consumerchoices.co.uk

If you have an oil heating system in your home, you'll know just how expensive it can be to fill up your tank and how important it is to make sure that you get the most competitive prices.

Cut the cost of your heating oil

While you might not have much choice about whether or not you use heating oil, there are things you can do to cut the cost of kerosene.

• Compare heating oil prices to find the best deal on the market.
• Invest in a larger tank, allowing you to stock up on heating oil during the summer when costs are usually lower, and simply top up when prices dip.
• Group buy your heating oil, rallying your neighbours round and bulk ordering your heating oil will get you a better cost as well as saving you money on delivery costs.
• Insulate your home using government grants, you can cut the cost of cavity wall and loft insulation, keeping more heat in your home so you use less fuel.
• Make energy saving changes such as turning your thermostat down or putting your heating system on a timer can save huge amounts of heating oil and really cut your costs.

Time your buying

Because heating oil is affected by supply and demand, the price should generally be lower in the summer months, when the weather is warmer and there is less demand.

As it gets colder and demand increases, the price will usually rise and there may even be severe weather warnings that could cause people to panic buy, pushing the price of heating oil up.

Rural deliveries

The more remote the area you live in, the more it will cost you to have your heating oil delivered. There might also be fewer suppliers to choose from delivering to your home, reducing competition and usually resulting in higher prices.

Heating oil price changes

The price of kerosene, which is used to heat your home, is linked to the price of crude oil, meaning that prices can easily fluctuate as the price of crude oil changes.

Supply and demand are two of the biggest factors affecting the price of heating oil, meaning that the amount you pay can change depending on the weather - as demand will be higher during the cold winter months, and even the demand for fuel to run cars, delivery fleets and flights can all affect the price you pay.

More remote concepts that cause the price of crude oil to fluctuate will also affect your home heating oil prices.

Poor economic conditions, where people spend less on cars, petrol and holidays, can push costs down as there is less demand, while political unrest in oil producing countries - and even a weak pound - can massively increase the cost of crude oil per barrel.

And you need to bear in mind that its not just conditions in the UK that affect prices. Changes in supply and demand across the globe can all affect the price of crude oil - which is sold in US dollars per barrel, meaning that currency changes can also have an effect.