Heating oil prices: why pay more? Discover heating alternatives
If you’re one of the 1.7 million households in the UK that rely on oil or LPG to heat your home(1), you’ll know it’s a real headache to arrange deliveries. There's the constant worry of running out and the challenge of finding the lowest heating oil prices.
How high are heating oil prices?
Average price of heating oil
The price you pay for heating oil can change quite a bit over time. That’s because it’s linked to wholesale oil prices, which go up and down depending on global supply and demand.(2)
In the UK, the average price of heating oil has varied significantly over the last couple of years. It has increased from 64.0p per litre in March 2024 to a high 136.3p per litre in March 2026.(3)
When you compare costs by energy use, heating oil has recently averaged around 5.9p per kWh. That’s slightly cheaper than gas at 6.3p per kWh, and lower than LPG at 9.1p per kWh. Electricity is typically higher, with standard rates around 25.9p per kWh, or 15.3p per kWh on off-peak tariffs.(4)
What about environmental impact?
It’s also worth considering the environmental impact. Heating oil is a fossil fuel and produces more carbon emissions than other common heating options.
For every kilowatt-hour of energy used:
- Gas produces around 208g of CO₂
- LPG produces around 241g of CO₂
- Heating oil produces around 298g of CO₂
That means heating oil creates around 43% more carbon emissions than gas, making it one of the more polluting ways to heat your home.
How can I pay less for heating oil?
If you rely on heating oil, there are simple ways to use less and potentially lower your bills:
- Turn your thermostat down slightly
Even reducing it by 1°C can make a noticeable difference - Use your heating on a timer
Only heat your home when you need it, rather than all day - Improve insulation
Loft and wall insulation help keep heat in for longer - Draught-proof your home
Seal gaps around doors and windows to stop heat escaping - Service your boiler regularly
A well-maintained boiler runs more efficiently - Use heating controls wisely
Thermostatic radiator valves let you heat rooms individually - Switch to more efficient systems over time
Options like heat pumps can help reduce both oil use and carbon emissions
Thinking about moving away from heating oil?
While there are ways to reduce how much heating oil you use, many households are starting to look at longer-term alternatives.
Systems like heat pumps don’t rely on delivered fuel, are far more energy efficient, and can help lower your carbon footprint. With government support and options like heat pump finance, switching is becoming more achievable for many homes.
Even if you’re not ready to make the move just yet, it’s worth exploring what’s possible, especially as energy prices and technology continue to evolve.
Pros and cons of an oil heating system
If your home isn’t connected to the gas grid, oil heating is a common solution. But like all heating options, it comes with advantages and drawbacks. Here’s what UK homeowners should know before making a decision.
Pros of oil heating systems
1. High heat output
Oil boilers are powerful and can heat large homes quickly. If you live in a bigger property or one with older insulation, an oil boiler can keep your home warm even on the coldest days.
2. Independence from the gas grid
For rural areas where gas isn’t available, oil is a reliable alternative. You control when and how much oil you order, so you’re not tied to a supplier’s pipeline.
3. Flexible installation
Oil boilers can often be installed where a gas system isn’t feasible. You can place the tank and boiler in out-of-the-way areas, making them suitable for many property layouts.
4. Modern oil boilers are efficient
Newer condensing oil boilers can reach efficiency levels of around 90%, meaning less fuel is wasted and you get more heat for your money.
Cons of oil heating systems
1. Price fluctuations
Oil prices can change significantly due to global markets, seasonal demand, and delivery costs. This makes budgeting for heating more unpredictable than gas or electric systems.
2. Higher carbon emissions
Heating oil is one of the more polluting domestic fuels. Heating oil creates around 43% more carbon emissions than gas, making it one of the more polluting ways to heat your home.
3. Storage and delivery
You’ll need a tank to store oil, which takes up space and requires regular deliveries. Running out mid-winter is a real risk if deliveries are delayed.
4. Maintenance and safety
Oil tanks need checking for leaks, and boilers require regular servicing. There’s also a small risk of theft from outdoor tanks.
Alternatives to oil heating systems
If you’re thinking about reducing or replacing oil heating, there are a few options to consider:
- Air source heat pumps
A lower-carbon option that can significantly reduce emissions and, in the right home, fully replace your boiler - Hybrid heating systems
Combine a heat pump with your existing oil boiler to cut oil use without fully switching straight away - Biomass boilers
Burn renewable materials like wood pellets instead of fossil fuels - Electric heating (with smart tariffs)
Modern electric systems paired with off-peak tariffs can help manage costs - Solar panels with battery storage
Generate and store your own electricity to support heating and reduce overall energy costs
Why switch to a heat pump heating system?
Switching to an air source heat pump isn’t just about moving away from oil, it’s about running your home in a smarter, more efficient way.
Air source heat pumps are becoming more affordable, thanks to the air source heat pump grant available through the Boiler Upgrade Scheme. To qualify, you’ll need to own the property (including homes, holiday lets or small commercial properties), replace an existing fossil fuel or electric system, and use an MCS-accredited installer. Other options, like air source heat pump finance, make it now easier for homeowners to spread the cost and switch to low-carbon heating.
To qualify, you’ll need to own the property (including homes, holiday lets or small commercial properties), replace an existing fossil fuel or electric system, and use an MCS-accredited installer.
While you’ll use more electricity (as it now powers your heating too), heat pumps can be three to four times more efficient than traditional oil or gas boilers.(5)Still concerned about air source heat pump costs? A well-designed system can still cost less to run overall, depending on your home and how well it’s insulated.
Heat pumps also work differently. Instead of heating your home in short bursts, they run steadily at a lower temperature throughout the day. The result is a more consistent, comfortable warmth, no more cold starts in the morning or chilly rooms when you get home.
Lower carbon, lower impact
Heating oil is a fossil fuel and one of the more carbon-intensive ways to heat your home. By switching to a heat pump, you can significantly reduce your emissions, especially if you choose a heat pump tariff.
Less hassle, more control
Moving away from oil also makes life simpler:
- No more organising fuel deliveries
- No risk of running out of oil
- Less exposure to price swings
- Fewer tankers delivering to your home
You may even be able to remove your oil tank altogether, freeing up space and reducing the risk of leaks or theft.
Switching to a heat pump is a big step, but it can bring long-term savings, greater comfort, and a lower-carbon home. Want more information, read our guide to air source heat pumps.
Why not see if a heat pump could work for you?
Oil boilers vs ASHP. A quick comparison
| ASHP | Oil boiler | |
| Upfront costs | From £3,999 with the Boiler upgrade scheme grant applied (eligibility criteria applies).(6) | £3,500–£5,500 (depending on the current set up) |
| Available grants | Up to £7,500 in England and Wales, up to £9,000 in Scotland | Nothing currently available |
| Running costs | £992 | £1,200–£2,000+ |
| Efficiency | 300%(7) | Around 85–90% |
| Install time | 4 - 5 days | 1 day |
| Lifespan | 20 years + | 10 - 15 years |
| Carbon emissions | Low-carbon, especially when powered by a zero-carbon electricity tariff | Higher emissions due to burning oil, a fossil fuel |
Looking to dive a bit deeper? Read our full blog on how oil boilers compare to air source heat pumps.
Frequently asked questions about oil heating
When is the best time to switch from an oil heating system to a new heating system?
The best time to switch is usually outside winter, when heating demand is lower. That gives you time to plan the installation without being rushed and may help you avoid higher costs. Many homeowners also use the spring or summer months to upgrade to more efficient or low-carbon systems, such as heat pumps or hybrid boilers.
Many homeowners also take the opportunity to upgrade their heating as part of another home project, such as a renovation, loft conversion, or major refurbishment. Similarly, if you’re moving into a new property, installing a modern, low-carbon system during renovations can be easier and more cost-effective than retrofitting later.
Spring and summer are often ideal for these upgrades, whether you’re installing an efficient boiler, a hybrid system, or a heat pump, giving you a comfortable, low-carbon home ready for the colder months.
Are heating oil and/or LPG prices covered under the energy price cap?
No. The energy price cap only applies to gas and electricity supplied through the mains. Heating oil and LPG are sold independently, so their prices can fluctuate depending on wholesale markets, delivery costs, and seasonal demand.
Is heating oil cheaper the more you buy?
Often, yes. Many suppliers offer discounts for bulk purchases, so ordering larger deliveries can reduce the price per litre. However, you’ll need space to store the oil safely, and it’s important not to overstock or let it sit too long.
