- Energy prices for suppliers and consumers have increased dramatically
- About 1.5 million people use heating oil, including Aga cooker owners.
- They’re likely to see some of the biggest increases in costs this winter
Families who use oil to heat their homes or heat their ovens may face the highest energy bills this winter.
There are about 1.5 million homes in the UK that use heating oil, including homes with fire cookers.
All these houses are likely to see a huge jump in prices due to the ongoing energy crisis.
Price hike: Homes using heating oil could face some of the highest energy bills
According to data from the Energy Helpline, since the end of August, oil heating costs have risen 36 percent, from about 44p per liter to 60p per litre.
This could increase even more, as demand picks up as the weather cools and crude oil prices continue to rise.
And unlike electricity and gas, there is no regulator to check rising prices.
It’s Money, with the help of Energy Helpline and YouSwitch, looks at how heating oil is used, why prices have gone up so much and if there is anything homes can do to keep costs down.
What is hot oil?
Unlike homes that use mains gas from the grid and have their gas supply available at all times, heating oil must be purchased directly for home delivery in bulk and stored in a tank.
The primary heating oil for UK homes is kerosene. It comes in two grades, Premium and Standard, which are priced accordingly.
Chemicals are added to premium heating oil that improve the efficiency of your boiler and reduce sludge buildup in the supply tank – similar to premium petrol for your car.
People may choose to use heating oil because it is considered an efficient fuel, with users generally getting a good return on each unit of energy.
It is typically used in a ‘wet’ heating system, where an oil-fired boiler heats the water, then provides central heating via radiators and hot water to the taps in your home.
Heating oil price rises to 60p since late August as wholesale costs rise
How much have prices gone up and why?
Like main gas prices, heating oil prices can fluctuate with the market.
However, unlike a main gas user, a heating oil user will feel this effect more directly because they are purchasing the oil in real time, rather than buying it from a supplier that has diverted their energy from being actually used. Have bought your energy first.
There are many factors that affect heating oil prices and a home’s ability to obtain the cheapest heating oil.
These include crude oil prices, refining costs, delivery and distribution costs, growth in demand, VAT rates, weather conditions and currency exchange rates.
At the start of the pandemic, prices fell by more than 40p per liter to around 20p per liter, as demand subsided.
Over the course of the year, prices returned to around the 40p per liter mark – but with demand picking up as the weather is cooling, and crude oil prices are on the rise, oil prices have risen dramatically over the past month. increased from.
According to the energy helpline, prices have now gone up 36 per cent in the past month and a half, from around 44p per liter to over 60p per litre.
However, in recent years prices have usually hovered around 50p a litre, reflecting a dramatic increase in costs this year.
This is because the price of heating oil is very seasonal, with cost increases regularly occurring whenever the seasons change and fall again when it is hot.
Many people have recently noticed a rise in energy whether they use gas, electricity or heating oil.
Can customers do anything to reduce bills?
One of the main things customers can do is visit comparison sites like BoilerJuice.
Once armed with quotes, homeowners can pick up the phone and negotiate with a provider to get a better deal.
Importantly, customers can also stock up on heating oil during the summer months when prices are lower.
Timing is everything, as hot oil prices are weather-linked and buying when it’s hot often leads to savings.
Customers may also consider installing a renewable heating system as an option.
This may include water-heating solar thermal panels or heat pumps.