Consumers Benefit from plummeting oil prices.
Since the 1 January 2016 heating oil prices have dropped by 10 per cent benefitting the UK's 1.4 million households on oil heating.
This reduction in oil heating prices is on top of the 29 per cent reduction in 2015. Meaning that oil heated households are saving hundreds of pounds on their annual fuel bills. According to online fuel price comparison websites the average Herefordshire selling price of kerosene as of the 4 February 2016 stood at just 27.3 ppl – the lowest point since March 2007 and well over 50% cheaper than when prices peaked in spring 2013.
A comparison by the Latest Sutherland Associates table, of the most common fuels across a range of standard house types throughout the UK, puts oil as the cheapest heating fuel available – more cost effective than natural gas. Over the past two years, oil has remained the cheapest heating fuel for off-grid homeowners with typical annual bills for a three bed house currently around £793 pa (Sutherland Tables, October 2015) – that’s 48.7% cheaper than LPG, 50% less expensive than electric storage heaters and some 24% cheaper than mains gas.
Unlike gas and electricity, oil users are saving hundreds of pounds as the price drop is being passed on to consumers. During 2015, the wholesale cost of oil fell by 44% and the average retail cost fell by a substantial 29%. By comparison, the average wholesale price of mains gas dropped by 34% but consumers only saw their fuel bills cut by a minimal 3%.
With cost of heating remaining an important driving factor for the majority of consumers, it is likely oil will continue to be the fuel of choice for existing users. These low prices could even encourage some of the other householders on LPG and those householders using electric storage heaters to switch to oil as a much cheaper option.
Martyn Bridges, director of marketing and technical support at Worcester, Bosch Group stated that he believes that even with the geo-political influences oil prices will remain strong for the foreseeable future. Jeremy Hawksley, director general of OFTEC, the trade association for the oil heating industry has also confirmed that he believes that the low prices are looking set to continue for the foreseeable future.
Please feel free to contact us to discuss any issues raised in our blog or to arrange a consultation to discuss upgrading your old oil boiler or replacing your existing boiler with an A rated oil boiler.
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Email us on: sales@neonheating.co.uk