Compared with electrical and gas heating, where you have to buy the going rate with your existing supplier at the time of use, oil heating has two huge advantages:
- you can purchase heating oil from any supplier you choose every time you fill your oil tank up
- the ability to store heating oil in an oil tank, giving you flexibility on when you buy heating oil.
By refilling your oil tank from the best supplier, and at the best time, you could save £100s annually.
In this article, we identify which suppliers offer the best heating oil pricing in our area. We have been surprised by the size of the differences that exist between suppliers at certain times, so it is essential that you shop around. We show that avoiding periods of high demand can also save a lot of money.
Online broker Boilerjuice has become popular but individual suppliers such as NRG can give significantly cheaper prices
Online ‘broker’ sites such as Boilerjuice, Fuel Fighter, Home Fuels Direct and Value Oils have become popular. Boilerjuice claims to be the “UK’s number one home heating oil provider”. By being able to negotiate prices between several oil suppliers, it claims to be able to save you time and money on your heating oil. Boilerjuice also promotes its ‘group savings’ where it automatically groups all orders in the same postcode over the same buying day or weekend, with everyone in the group paying the same price for their oil.
At first glance, these sites seem a no-brainer don’t they? The idea that they can save you a lot of time avoiding phoning round lots of oil companies and let the company use its buying power to secure the best price from the cheapest supplier.
However, our analysis shows that, often, Boilerjuice is not necessarily cheaper than dealing directly with the cheapest local oil company, presumably because Boilerjuice has to its extract its own profit margin as the ‘middleman’ between consumers and the oil delivery companies. Now that many oil companies have become better at providing their own immediate online heating oil quotations, the hassle of comparing heating oil prices has been reduced.
On 22nd April 2022, we sought numerous quotes for the delivery of 500 litres of heating oil by the 9th May, and the results are shown in Figure 1, below.
Figure 1: Quotes for 500 litres of home heating oil (inclusive of VAT) [Source: Paul Braybrooke, April 2022]
At the time, Fuel Fighter provided the lowest price of all broker sites, and NRG provided the very cheapest quote of all companies.
Our current recommended local supplier (based on consistently offering lower prices than brokers) is NRG, which supplies heating oil to homes and businesses throughout the Midlands, the East and North of England. You can get an online quote here:
Buy oil at the best time of the year if you can to avoid periods of peak demand and avoid ’emergency’ deliveries
In general, oil prices go up and down, as shown in Figure 2 below, in line with demand and the price of crude oil. You can save significant sums on heating oil by timing your purchases to times when the oil price per litre is lowest.
Figure 2: Variation in heating oil pricing (pence per litre) over 10 years [Source: Office for National Statistics, April 2022]
There are, in general, significant seasonal effects, and oil companies generally charge significantly more for ’emergency’ deliveries compared with standard deliveries with longer lead times. We strongly recommend that you monitor your oil usage regularly. We supply a wireless Watchman oil tank gauge with the oil tanks we install for free, and find that these devices are very useful for accurately monitoring usage without having to go outside to check the oil level.
Ideally, it is best to avoid peak periods when many households are wanting to fill up their oil tanks (for example, just before Christmas). According to Crown Oil, generally speaking, summer is the best time to buy heating oil. Crown Oil says that you can usually expect the price to go up during periods of high demand, such as in the winter, when the majority of homes are filling their tanks to stay warm. Periods of very low temperatures will usually encourage many households to order heating oil. Crown Oil recommends that households should order heating oil ahead of the cold months. Its own analysis found that the average national price of heating oil in August compared to December in 2016-2019 varied by 14%.
Avoid having to get expensive ’emergency’ deliveries. Regularly checking the oil level will help to ensure that you do not run out of oil or run your oil too low. Oil suppliers generally charge much more for emergency oil deliveries rather than standard deliveries with longer lead times. As an example, we got a quote in early April 2022 for 500 litres of heating oil from Boilerjuice. For a short-term ’emergency’ delivery by Friday 8th April, the price was £711.37 compared to a standard delivery by Friday 22nd April 2022 of £458.74 – a huge difference of over £250 (effectively a surcharge of over 50p per litre).
As well as being subject to seasonal and weather variations, the price of heating oil is also affected by the global supply of crude oil, and major political events. For example, following the invasion of Ukraine, the price of crude oil and heating oil dramatically increased, and the price of 500 litres of heating oil reached more than £900 for several days, with panic buying making the situation worse. Subsequently, the price of heating oil declined significantly. Storing adequate volumes of heating oil allows you to avoid such oil heating price spikes or supply problems.
A new, larger oil tank provides increased opportunity to buy when prices are low and avoid oil price spikes
Since the invasion of Ukraine, we have noticed a significant increase in the number of households in the area enquiring about oil tanks. Installing a replacement oil tank with higher capacity now is a sensible option for those who want to beat inflation-linked oil tank price increases and reduce susceptibility to future oil price spikes. If you have the space availability, a higher capacity oil tank will:
- reduce the number of refills required
- allow you to buy more volumes of oil when prices are low (so you shouldn’t need to refill when prices are high)
- reduce your sensitivity to heating oil price spikes or supply issues.
In general, the extra cost of a bigger tank will be quickly offset by the savings you make in oil costs. For a quote for the installation of a new oil tank, please contact us.
If you take the opportunity to upgrade an old, inefficient boiler, you will find that oil consumption will be substantially reduced. For example, a household with a 20-year-old boiler with 60% efficiency, which consumes 2,500 litres of oil annually, would consume only 1,579 litres with a replacement oil boiler with 95% efficiency. That’s 921 litres of oil that don’t need to be purchased. Even if the existing oil tank was kept, the reduced oil consumption would provide more flexibility to avoid paying high prices for oil. So, a new oil boiler would yield substantial cost savings from reduced oil consumption and increased opportunity to pay less for oil (per litre).
Be wary of signing up with a single supplier offering regular top-ups
Some oil providers offer customers the opportunity to pay for oil using regular direct debit payments, where they take charge of ensuring the tanks of their customers are regularly topped up so that they don’t run out of oil. While these schemes may seem convenient, we are wary of such schemes. That’s because households essentially lose two of the key benefits of oil heating, which are:
- the opportunity to compare heating oil suppliers every time the oil tank is refilled to find the lowest price
- the flexibility to fill a tank when heating oil prices are at their lowest, rather than the price when the oil company decides to fill the tank.
If you wish to track your oil consumption more regularly or avoid running out of oil, we suggest that you get a wireless oil gauge fitted. All our replacement oil tanks come with Watchman oil tank gauge installed for free, so you can monitor your oil consumption without ever going outside. For more information, please contact us.
To view more of our oil heating guides, visit:
By following our guides, oil heating will continue the cheapest form of heating available for many years to come.