Heating Oil Prices UK: Complete Guide to Costs, Trends & Savings

How Heating Oil Prices Are Set

Heating oil prices in the UK are determined by a complex chain of factors, starting from the global crude oil market and ending at your tank. Understanding this chain helps explain why prices fluctuate and how you can time your purchases better.

The Pricing Chain

1. Global Crude Oil Markets Heating oil (kerosene) is a refined petroleum product. Its base cost is directly linked to the price of Brent Crude, the international benchmark for oil prices. When Brent Crude rises, so does heating oil — typically within days.

2. Refinery Costs Crude oil must be refined into kerosene at specialised facilities. Refinery capacity, maintenance schedules, and regional demand all affect the wholesale price of heating oil.

3. Exchange Rates Oil is traded globally in US dollars. When the pound weakens against the dollar, UK heating oil becomes more expensive — even if global oil prices haven't changed.

4. Distribution and Delivery Local suppliers add their margin for storage, transport, and delivery. This is where regional price differences emerge based on competition, delivery routes, and storage costs.

5. Taxes Domestic heating oil attracts 5% VAT in the UK (compared to 20% standard VAT). Unlike road fuel, there is no fuel duty on heating oil.

Current UK Heating Oil Prices

Heating oil prices change daily based on market conditions. As of January 2026, typical prices for 1,000 litres of kerosene range from:

Prices vary by region and supplier. Always compare quotes for accurate pricing.

Why Price Per Litre Drops with Quantity: Larger orders spread the fixed delivery costs across more fuel, reducing the per-litre price. Most suppliers offer their best rates for orders of 1,000 litres or more.

Regional Price Variations

Heating oil prices vary significantly across the UK. Several factors drive these regional differences:

Generally Lower Prices:

Generally Higher Prices:

Price Differences Can Be Significant: The same 1,000-litre order might cost £550 in Northern Ireland but £620 in Surrey. This makes comparing local suppliers essential — you need quotes relevant to your specific postcode.

Seasonal Price Trends

Heating oil follows predictable seasonal patterns that savvy buyers can use to their advantage:

Spring (March - May)

Summer (June - August)

Autumn (September - November)

Winter (December - February)

The Pattern Is Clear: Buy in summer when possible. If you can't, early autumn is your second-best option. Avoid panic buying in mid-winter.

Factors That Affect Your Price

Beyond timing, several factors influence the price you'll pay:

Order Quantity

Larger orders get better per-litre prices. The sweet spot for most households is 1,000 litres — big enough for a good discount, not so big you're tying up capital.

Delivery Access

If your property has difficult access (narrow lanes, weight restrictions, long hose runs), some suppliers may add a surcharge or be unable to deliver.

Payment Method

Your Location

As covered above, your postcode affects which suppliers can reach you and at what cost.

Current Supplier Competition

Areas with more suppliers tend to have keener prices. Using a comparison service ensures you're seeing all available options.

Historical Price Trends

Understanding long-term trends helps set expectations:

10-Year Overview

Key Lessons

1. Prices can spike dramatically during geopolitical events 2. They also fall significantly during demand collapses 3. The long-term average is around 50-55p/litre 4. Volatility makes timing and comparison essential

How to Get the Best Price

Follow these strategies to minimise your heating oil costs:

1. Compare Every Time

Never assume your current supplier is cheapest. Prices vary by 10-20p per litre between suppliers. For 1,000 litres, that's £100-£200 difference. Use our price comparison tool to check multiple suppliers in seconds — just enter your postcode and order size to see live quotes.

Not sure which suppliers cover your area? Browse our local suppliers directory to find verified heating oil companies near you.

2. Buy in Summer

Fill your tank between May and August when prices are lowest. Even if you don't need much oil, buying ahead saves money.

3. Order Larger Quantities

If you have tank capacity, ordering 1,000 litres instead of 500 typically saves 5-10p per litre.

4. Join a Buying Group

Community oil syndicates negotiate bulk discounts. The collective purchasing power can secure prices 2-5p per litre cheaper than individual orders.

5. Don't Wait Until Empty

Ordering when desperate limits your options and may incur emergency delivery fees. Aim to reorder when your tank drops to 25-30% capacity.

6. Monitor the Market

Sign up for price alerts and keep an eye on crude oil trends. If prices are dropping, waiting a week might save you money. If they're rising, order promptly.

Frequently Asked Questions

How often do heating oil prices change? Daily. Prices are influenced by global oil markets which trade 24/7. What you're quoted today may differ tomorrow.

Is heating oil cheaper than gas? It depends on current prices, but heating oil typically costs 5-6p per kWh compared to 5-7p for mains gas. The difference is marginal, but oil requires bulk purchasing upfront.

Why is my quote different from my neighbour's? Different suppliers, order quantities, and even slight postcode variations can affect pricing. Always get your own quote.

Should I buy premium kerosene? Premium fuels contain additives for cleaner burning and longer storage. They cost 2-3p per litre more. Worth considering if your tank is exposed or you use oil sparingly, but not essential for most users.

Can heating oil prices be locked in? Some suppliers offer fixed-price contracts or price caps. These protect against spikes but may mean you pay more if prices fall. Most domestic users buy at spot prices.