Heating Oil Price Comparison

We do it when we buy car insurance. We do it when we buy airplane tickets but for some curious reason we are reluctant to shop around when it comes to buying heating oil. By the end of this article, I hope to have convinced (and maybe inspired) you to compare heating oil prices before you buy!

Compare Heating Oil Prices

Domestic Heating Oil originates (to all intents and purposes) from the wholesale market, and is a commodity which is subject to suppliers buying and selling and the usual market forces. This means that significant differences in prices can be found, and three of the most important factors are:

1. WHEN the retailer made a bulk purchase from the wholesale market (if they bought cheap, they can pass on the savings to their customers, or boost their margins).

2. WHAT current demand there is (Economics 101: supply effects demand and demand effects supply).

3. HOW people’s perceptions change (e.g. is cold weather coming? will political instability drive up prices? Is the government going to change fuel taxes?, etc.).

Taking all the above into account, price differences between heating oil suppliers can easily amount to 2-5 pence per litre. A 5 pence per litre difference on a 2,000 litre domestic heating oil tank is… hold on whilst I find my calculator… £100!

It is important to recognise that heating oil prices can fluctuate on quite short term cycles, this means that what you pay one week may easily be less (or more) when compared to the same order the following week. On a more macro scale, we traditionally see large price reductions during the summer months when demand is low.

It is also worth briefly mentioning regional variations in price. There can be quite large regional differences in prices that the ‘headline prices’ don’t reflect. For example, delivered oil (per litre) to remote places is higher than more populous (and often better served) locations that have greater numbers of fuel suppliers operating. The lack of apparent competition can mean that comparison shopping is difficult, but the critical thing is to be informed and use this knowledge to negotiate! The supplier may push back but you are in a stronger bargaining position if you know your stuff.

So cancel that Direct Debit to your oil supplier today and begin to shop around. The internet and the web is revolutionising how we discover and put together domestic oil deals for our central heating. There are now a number of heating oil comparison sites springing up that offer a comparison service, similar to those we have seen for years in car insurance and mobile phone buying. In fact, this site has a sister site called Find A Fuel Supplier which is a fully independent price comparison service. This independence is important; certain companies have been wrapped on the knuckles recently for appearing to offer independent price comparison when they were owned/affiliated to an oil supplier. Another thing to watch out for!

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