Kerosene Price

Kerosene prices can vary substantially from one area to another and are susceptible to changes in wider energy markets.

Used principally in the UK as a heating oil, kerosene is a petroleum derivative and as such kerosene prices are in part dictated by the global trading price of crude oil.

When crude oil prices increase, fractional distillation processes become more expensive and converting crude into kerosene - in addition to many other derivatives such as marine fuel and diesel - becomes more expensive and as such, kerosene prices paid by end users will increase to compensate for this increased outlay.

As such, consumers may benefit substantially from checking kerosene prices before buying stocks as small daily fluctuations in per litre kerosene prices can soon add up when purchasing large amounts.

While kerosene prices have broadly been seen as competitive with costs associated with other home heating methods such as mains gas or electricity, kerosene prices were subject to substantial upward pressure during recent times.

Just as electricity and gas prices have proved vulnerable to surges in the price of oil, kerosene prices also suffered during the first half of 2008, when crude breached the $100 per barrel mark and went on to reach a record high of $147 per barrel.

As a result, all industries which are dependent on oil derivatives saw their fuel costs escalate. While a number of airliners went bust during the first nine months of the year, fishermen and hauliers were also hit. Meanwhile, domestic heating oil customers saw the kerosene price increase too.

In basic economic terms, kerosene prices will vary based on changes in both the supply of and demand for crude oil around the world. While fears that oil is running out pushed up prices in the first half of the 2008, the subsequent crisis in the international banking system also highlighted the effect of falling demand on oil and kerosene prices.

In October, crude oil traded at a 13-month low of $73 per barrel, with a concomitant fall in kerosene prices also witnessed in many parts of the world.