Heating Oil Prices

OPEC Agreements

The Organisation of the Petroleum Exporting Countries (OPEC) is a group of 12 member countries. The organisation meets regularly to co-ordinate policies, in an attempt to stabilise global oil prices whilst maintaining a reliable supply. Agreements made by OPEC can affect Crude Oil Price, which in turn causes changes to the price of domestic fuels.

Foreign Exchange Rates

In the United Kingdom we import a lot of our heating oil from other countries, this means changes in exchange rates can directly affect the amount you pay for your home heating oil.

Conflicts

It’s well known that conflict in oil producing countries affects the price of crude oil. Even if it is still possible to export oil from conflict zones the cost for that oil can increase dramatically. This is down to the need for additional protection and security at oil extraction facilities and refineries.

Supply & Demand

Throughout the year the demand for heating oil rises and falls depending on the seasons and the weather. As demand rises prices can increase as the higher demand puts a strain on the supply. In recent years periods of oversupply have lead to dramatic decreases in the price of kerosene.

Crude Oil Price

As kerosene is refined from crude oil it’s price is directly linked to the price of crude oil. Another factor to bear in mind is that the cost to refine crude oil to kerosene can also vary, again leading to changes in home heating oil price.

Fuel Duty & VAT

Whilst Fuel Duty and VAT rarely change it’s important to remember that they’re payable and contribute to the amount you pay for your fuel oil. To find the up to date Fuel Duty Rate and VAT rate for domestic heating fuel click here.

Delivery Costs

As the price of petrol and diesel fluctuates suppliers change what they charge for kerosene. They do so to cover increased delivery costs or to pass on savings in deliveries, depending on which way fuel prices have shifted.

Weather

Although poor weather can lead to changes in demand the weather can also lead to increased delivery costs. Poor weather conditions can mean deliveries take much longer, increasing the amount suppliers have to pay their drivers and also increasing the amount paid for petrol/diesel.