Domestic heating oil prices

Because heating oil is an oil derivative, domestic heating oil prices are subject to wider fluctuations in the costs of crude oil, which is in turn vulnerable to changes in wider global events.

The link between the price of oil and wider supply and demand fluctuations have been brought into sharp relief in recent times as a number of events caused substantial increases and falls in the price of crude oil and concomitant surges in heating oil prices.

For example, during the 2008 hurricane season, many oil rigs operating in the Gulf of Mexico were evacuated as hurricanes Ike and Gustav approached the region. As such, during this drop of production, America was more heavily reliant on foreign oil imports to meet demand requirements. Because of this increased dependency, prices of crude oil rose considerably. In turn, consumers in the UK and other countries saw a notable increase in the cost of domestic heating oil prices.

The surge in oil prices witnessed in the first half of 2008 also had a knock-on effect for the costs of other forms of energy and gas, with all major UK suppliers enacting substantial prices rises in order to absorb the rising costs. But while all energy costs increased during this period, domestic heating oil prices have remained broadly competitive.

According to statistics published by Sutherland Tables, domestic heating oil prices for an average three-bedroom house stood at £1044 for the period between November 2007 and April 2008.

Domestic heating oil prices are commonly based on a per litre basis. Nelmes.fsnet.co.uk has reminded customers that domestic heating oil prices are likely to change considerably over short periods of time, making it important for people to check that per litre domestic heating oil prices are competitive.

For example, the website noted that domestic heating oil price checks carried out on August 22nd 2008 showed fluctuations of as much as 2.25 pence per litre, which will soon add up for customers looking to buy fuel for large tanks. Many residential tanks have capacities as high as 1,000 litres, making it important to check domestic heating oil prices before committing to purchase.