Heating Oil Hits 101p/litre: Should You Switch Fuels This Winter?
Oil prices surge past 101p/litre as winter approaches. Here's how it compares to gas, electricity, and wood pellets—and whether a switch makes financial sense.
Heating oil has climbed to 101.1p/litre, marking a critical price point for the estimated 1.5 million UK households relying on oil boilers. With winter demand ramping up and global refinery constraints tightening supply, homeowners on oil are facing steeper bills than they saw last year.
For those considering their options, the comparison is stark:
• Heating oil: 101.1p/litre — roughly 9-10p/kWh equivalent
• Mains gas: 6.04p/kWh (Ofgem cap)
• Electricity: 24.5p/kWh (Ofgem cap)
• Wood pellets: 7.2p/kWh
Oil remains the most expensive fuel per unit of energy, despite recent volatility. If you're an oil customer, your heating costs are now approximately 50% higher than gas users on the price cap, assuming comparable consumption.
Why oil prices are climbing
Refinery capacity constraints—compounded by environmental compliance pressures and geopolitical supply disruptions—continue to support crude prices. Recent reports of pollution violations at UK refineries underscore the infrastructure challenges facing the sector, potentially limiting domestic production capacity further.
Your realistic switching options
If you're on oil and considering alternatives, be realistic about what's available:
Mains gas remains the cheapest option if your property is on the network. Compare mains gas suppliers to lock in the Ofgem cap rate (6.04p/kWh), though connection costs may apply if you're not already connected.
Wood pellets (7.2p/kWh) offer modest savings versus oil and qualify for the Boiler Upgrade Scheme if you install a biomass boiler. However, this requires upfront capital investment and suitable storage space.
Wood pellet prices can fluctuate seasonally, so early-winter ordering is advisable.
What about sticking with oil?
If switching isn't practical, focus on cost management:
• Order early — bulk orders placed now may secure better rates than spot purchases in December
• Review your boiler efficiency — older oil boilers waste 15-20% of fuel; a modern condensing model cuts consumption by up to 35%
• Bleed your tank annually to remove water that corrodes components and reduces efficiency
• Compare oil suppliers regularly — prices vary by region and supplier
The longer view
Oil heating faces structural headwinds. The government's phase-out of fossil fuel boilers continues, and insurance costs for older systems are rising. If you're planning to stay in your home beyond 5 years, investing in gas connection or a heat pump becomes increasingly attractive.
Action now: If you're on oil, get three quotes from local suppliers for winter delivery this week. Prices typically spike in November. Check whether your property qualifies for mains gas connection—if it does, request a quote. Compare all options side-by-side before committing to another winter on expensive oil.