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Buying domestic heating oil

The domestic heating oil market is complex and many people find it hard to get a competitive price.

Getting it for less ...

There are independent websites that allow you to track the price of heating oil and find a better price: examples of these are BoilerJuice and Fuel Tool. As in the gas and electricity market, new heating oil customers tend to get a better price than long-standing ones. So if you've been with the same supplier for ages, it's worth having a look around for a better deal.

Another option is joining an oil buying club. These are groups of households who join up to negotiate a better price through bulk purchasing. A typical saving for members of oil buying clubs is around £120 per year, but you could save even more depending how much oil you use and how much you're currently paying. The Community Energy Club in Cornwall is a good example, but there are dozens nationwide, and you can search for an oil buying club near you using the Citizens Advice oil clubs map.

If you live in Bath & North East Somerset, North Somerset, Bristol or South Glos, then you could become a member of the West of England Rural Network's community oil buying club (free membership to people aged over 60 at the time of writing). 

See also the the Community Council for Somerset's oil buying scheme.

Households in Somerset with an income of less than £35,000 per year can apply for an interest-free council funded loan to buy domestic heating oil, enabling them to spread the cost across a number of months rather than paying out one or two large lump sums. Contact Wessex Resolutions CIC for details.

If you can afford to, and have a suitable and secure place to store it, then you can also save money by buying your heating oil in bulk during the summer months when prices are lower. Note that this will leave you with a valuable commodity at the end of your garden that may attract thieves; the website oiltheftwatch.org offers tips on how to protect your oil tank.

The domestic heating oil market is complex and many people find it hard to get a competitive price.

Buying heating oil for less

There are independent websites that allow you to track the price of heating oil and find a better price: examples of these are BoilerJuice and Fuel Tool. As in the gas and electricity market, new heating oil customers tend to get a better price than long-standing ones. So if you've always been with the same supplier for ages, it's worth having a look around for a better deal.

Another option is joining an oil buying club. These are groups of households who join up to negotiate a better price through bulk purchasing. A typical saving for members of oil buying clubs is around £120 per year, but you could save even more depending how much oil you use and how much you're currently paying. 

The Community Energy Club in Cornwall is a good example, but there are dozens nationwide, and you can search for an oil buying club near you using the Citizens Advice oil clubs map.

If you live in Bath & North East Somerset, North Somerset, Bristol or South Glos, then you could become a member of the West of England Rural Network's community oil buying club. They currently offer free membership to people aged over 70.

See also the the Community Council for Somerset's oil buying scheme.

Unsurprisingly, the local price of heating oil varies according to the time of year, so if you can afford to, and have a suitable and secure place to store it, then it may be worth you buying your heating oil in bulk during the summer months when prices are lower. Note that this will leave you with a valuable commodity at the end of your garden that may attract thieves; this website offers some tips on improving the security of your fuel.

Alternatives to oil

Have you ever considered moving off oil altogether? For people in rural areas with a reliable source of wood fuel (logs, chips or pellets), biomass heating may be a viable option. Or for those with a well-insulated home and some land, then a ground source heat pump could be worth looking at.

Or how about getting some of your water heating needs taken care of by the sun? If your roof is south facing and unshaded, a solar thermal system can help you offset as much as half of your domestic water heating costs.

All of the above can qualify for payments through the Renewable Heat Incentive.

Alternatively, have you investigated whether you could get connected to mains gas? A modern high-efficiency gas condensing boiler is significantly cheaper to run than its oil-fired equivalent. If you live in this area and you or your partner are aged over 70 or receive a qualifying income related or disability benefit then you could receive a grant of up to £2,778 + VAT to get your home connected to mains gas by Wales & West Utilities. Visit the Integrated Energy Services website for details of how to apply. 

Finally, don’t forget that the best way to reduce your heating costs is to reduce the amount of fuel you use. If your oil-fired boiler is old or unreliable then you'll reduce your running costs significantly by replacing it with a more efficient condensing oil boiler that'll give you more heat for less oil. And you should also ensure that your home is well insulated. See the followoing pages for information about keeping the heat at home:
Loft insulation
Cavity wall insulation
Solid wall insulation (internal)
Solid wall insulation (external)
Underfloor insulation
Secondary glazing
High performance external doors

Alternatives to oil

Have you ever considered moving off oil altogether? For people in rural areas with a reliable source of wood fuel (logs, chips or pellets), biomass heating may be a viable option. Or for those with a well-insulated home and some land, then a ground source heat pump could be worth looking at.

Or how about getting some of your water heating needs taken care of by the sun? If your roof is south facing and unshaded, a solar thermal system can help you offset as much as half of your domestic water heating costs.

All of the above can qualify for payments through the Renewable Heat Incentive.

Alternatively, have you investigated whether you could get connected to mains gas? A modern high-efficiency gas condensing boiler is significantly cheaper to run than its oil-fired equivalent. If you live in this area and you or your partner are aged over 70 or receive a qualifying income related or disability benefit then you could receive a grant of up to £2,778 + VAT to get your home connected to mains gas by Wales & West Utilities. Visit the Integrated Energy Services website for details of how to apply. 

Finally, don’t forget that the best way to reduce your heating costs is to reduce the amount of fuel you use. If your oil-fired boiler is old or unreliable then you'll reduce your running costs significantly by replacing it with a more efficient condensing oil boiler that'll give you more heat for less oil. And you should also ensure that your home is well insulated. See the following pages for information about keeping the heat in at home:
Loft insulation
Cavity wall insulation
Solid wall insulation (internal)
Solid wall insulation (external)
Underfloor insulation
Secondary glazing
High performance external doors


The heating oil market

The first thing to understand about the heating oil market is that the wholesale price of oil only fluctuates due to global events, including the current global output of oil and the relative value of certain currencies. However, the price you pay locally is almost entirely affected by supply and demand. You pay what the supplier thinks they can charge you based on the time of year and other factors.

The biggest supplier in Britain is DCC Energy, part of the DCC group. This is from their website:

"DCC Energy has been the consolidator of what was and continues to be a highly fragmented oil distribution market in Britain. DCC Energy ... has acquired and integrated 28 businesses [and] is now, by far, the largest oil distributor in Britain. DCC’s market in Britain comprises transport fuels and heating oils to commercial, industrial, domestic, agricultural and dealer owned petrol stations...giving a market share (excluding DCC Energy’s supply to larger dealer petrol stations in Britain) circa 16% ... DCC Energy operates in the independent dealer owned segment of the retail market and today is the largest supplier to this segment, based on the number of sites (selling to approximately 1,600 sites)."

Essentially what this means is that there are many apparently independent suppliers of domestic heating oil using different names, which are actually part of one big supply group. Even where genuinely local suppliers do exist it has been suggested that they tend to “respect each other’s geographical boundaries”. There are also some practical limitations, such as getting a suitably sized delivery vehicle to access your home, which affect the ability of some suppliers to take you on as a customer.

This all adds up to a market that is not as competitive as it might be. The All Party Parliamentary Group on Off-Gas Grid has published an excellent report into this.

Industry trade associations OFTEC and FPS Ltd have come together to provide advice to heating oil customers through their Oilsave website. OFTEC also produce a range of guides for domestic heating oil users.


CSE developed this guidance due to the response to our contribution to Money Box Live (first broadcast 4 December 2013).

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Oil Tank Security