UKC

Wondering if anyone could shed some light on the disparity between heating oil price rises and petrol / diesel price rises on the forecourts?

According to Boiler juice heating oil chart (approx) 

Oct 21 -45p a litre

Jan 22 - 60p a litre

Mar 22 - £1.70 a litre (has since fallen a bit)

That's a jump of nearly 300% from Jan to March. Petrol and diesel have not gone up anywhere near as much. Anyone know why? 

Partly - no road fuel duty which, as a fixed per litre tax, increases the per litre pump cost of road fuels and reduces the % change in the pump cost vs the % change in the pre-tax cost.

Thx, but i'm still not convinced it explains the price rise of heating oil.

Lets assume diesel and heating oil are the same base product (not a lot of difference)

heating oil was 60p a litre in Jan (57p minus the 5% VAT) 

If we add the duty and 20% VAT to make up an approx diesel price it would be 57p + 58 p duty x 20% = £1.38

When heating oil was £1.70 a litre , diesel was about £1.70 a litre. Why wasn't it closer to £2.73?

(I am sure my maths is probably off and i'm missing other stuff but thought it was worth investigating)

EDIT - there is 10.7p duty added to heating oil which I hadn't considered above. But point still stands. Before duty and VAT - if the base product goes up, the one with higher VAT % and higher duty should rise more than the one with less duty and smaller VAT % right?

Yes; I said partly.   It explains part of the reason why the % increase in heating oil is larger than road diesel, it does not explain it all. With it hitting parity to road diesel there are clearly other factors.

Consumption of heating oil is far more seasonal that for road fuel; I don’t know how that affects demand at different times of the year - do people fill up before or after winter?

I’m sure sales forces (the heating oil industry has more direct sales than fuel, nobody ever phoned me asking if I wanted to fill my car) won’t have let fuel anxiety go to waste…

there is definitely seasonal demand in heating oil. I'm just surprised it rose so much more than other fuels when the oil price spiked late Feb, especially when the VAT and duty are less than on the fuels I mentioned. Guess it will have to remain in my mystery bin

I don't think it comes anywhere near to explaining the difference.

Red diesel has suffered from the same disproportionate price increase. At the end of last week there was no price differential between a 2000 litre delivery of red diesel or a 20 litre purchase of white diesel from the forecourt if you were able to reclaim.the VAT.

Yes, I've found the heating oil hikes to be shocking BUT nowhere near as shocking as the 300% increase in my electricity bill (from £78 pcm to £235 pcm) when my contract expires in mid april. I really can't see how Scottish Power can justify this when Saint Nicola is constantly telling us that we regularly exceed the daily requirements in Scotland from renewables alone. 

Me thinks porky pies.

Scottish Power doesn't just use renewables (or just supply Scotland) so it's still affected by the rise in the cost of gas - https://www.scottishpower.co.uk/about-us/performance/fuel-mix

Assumedly the ScottishPower Green Tariffs using 100% renewables isn't strictly true. When there is not enough renewable power people on these tariffs will still be using gas etc its just that the non renewable energy used is later offset by renewable energy. 

I just googled and found this, sounds like the energy market needs reforming https://inews.co.uk/news/politics/why-the-high-cost-of-gas-also-makes-renew...

It's interesting because the structure as it currently is will create an incentive for renewables. Your cost of production is lower but the price you can charge is high. I've got mixed feeling about this!

Well yeah but as the quantity of renewables increases and the amount of oil left on the planet goes down (squeezing price) it makes less sense. Ofc we may eventually have the opposite issue where no one wants oil and its super cheap? 

A guy on site was telling me about this this morning. He got his heating oil tank filled up in January for £360, yesterday just to see he priced up the same quantity at £1400.

We have a 1000 ltr fuel tank at work, I wish I had filled it with diesel a few weeks ago. 

I don't think boiler juice is entirely accurate.  A few weeks ago we paid 15p/l less than it was showing at the time.  I suspect it also scrapes prices from suppliers and at least some companies (Certas) had stopped listing prices online.  If this was widespread it could have skewed the data underlying the graph

£360? He must have a bloody small tank!

Our tank is 1250l.and our last bill was about £360. We never let it empty right down. The village has a syndicate and we buy en masse keeping the price a bit lower but I'm still dreading the next fill. Hoping to hold out until September. 

£360 = 600 litres at the jan price given; doesnt seem that small to me as that was a top up.

Mind you, the only heating oil tank i have really ever had dealings with was at work, and that held 2000 litres, so somewhere between 600 and 1000 seems reasonable for a domestic one.

I've got a 5000L tank which came with the house and we're scrapping it sometime this year for a new heating system so I've been trying to minimise oil purchases so I don't end up with loads of excess. 

This caught me out as I had to get a delivery yesterday. Deliveries are being limited to 500L per order (apparently demand has gone through the roof) but even that cost me 968€

The new system keeps getting delayed so I'll have to buy some more before long (we're in the mountains, it's a big house and the boiler is old and inefficient and heats both radiators and sanitary hot water). 

Maybe, though that would give £2.33 a litre yesterday, which seems high given boilerjuice (who are always expensive) stated a max of £1.70.

Mine's 2000 litres, so always buy over 1000 (saves a couple of pence per litre). 

If the situation is anything like here you'll easily find someone who will remove the tank and oil for nothing / cash adjustment when the time comes.

He said it was about 750 lts,  that at 1.70 per ltr would be £1275 so allowing for a bit exaggeration to make his point its probably about right. 

We had an oil delivery today.  It cost over £500, whereas our last delivery for the same amount was not much more than £200.

We replaced the majority of the heating system two years ago (everything but the tank) and at the time thought about an air source heat pump, but decided against it.  I’m wondering now if we made the right choice. That said, it’s a large 200 year old house and I had heard that air source heat pumps can struggle to get such properties warm.

Unfortunately the tank is buried next to the house and we've been told it needs to be properly decommissioned (eg removed by a pro or filled with concrete). I'm sure there will need no shortage of dodgy types willing to take it off my hands though. 

I had an interesting chat with the owner of a domestic heating oil supply firm (also does commercial diesel). None of what was said has been verified by me, just one person in the business expressing knowledge/opinion. It's worth noting that, to all intents, heating oil is diesel.

While only 6% of our crude comes from Russia, 30% of our refined products do and this is mainly the heavier fractions (diesel). This is due to the closure of the Grangemouth refinery the capacity of which has not been replaced in the UK. In practical terms this means there is quite a severe shortage of diesel in the UK, something the Government are being very quiet about to avoid panic buying. This means there is no surplus to sell as heating oil and what comes out of the refinery is the same price regardless of its use (previously heating oil was a little cheaper). It's not that there is a high demand for heating oil, there is a shortage of supply (although demand is up a bit due to people holding back from what was thought to be high prices a month ago).

Interestingly the price out of the refinery fell around 20% over a week ago and my source maintains fuel retailers are price gouging at £1.70 when the price should be £1.55. 

That tallies with what I've been observing when driving past garages - a lot of diesel pumps closed off but not petrol.  I'll update my "981 Cayman" pros/cons list accordingly.

It's starting to spook me out how well this all seems to be getting managed so far.  Random strangers are striking up conversations over the price and availability at forecourts but nobody is panicking despite certain trigger words starting to appear in news articles.

I ran out of oil once at the weekend (stupidly assumed it would last much longer than it did) and a plumber mate just told me to buy some diesel from the filing station and chuck it in the tank which did the job fine ins pinch. 

Handling it all up close though (filling Jerry cans etc) made me realise (more than I did already) how utterly filthy the whole process of burning oil for domestic heating is and spurred meet on to get rid of it as soon as I can.