Industry figures have shown that heating oil is now cheaper than mains gas for home heating.
According to the Sutherland Tables, an independent source of data on comparative UK domestic heating prices, oil is now the cheapest of all the major heating fuels, costing £119 less a year to heat an average three-bedroom home than mains gas, the second cheapest option.
The data also found that the price of kerosene had fallen by nearly 30% over the past two years and it was the first time the price had fallen lower than mains gas since 2010.
Comparing the cost of heating the same average home with either LPG or electric storage heaters – the other main heating methods used by households off the gas grid – oil remains considerably cheaper, coming in at 47% less expensive than LPG and 37% cheaper than electricity.
OFTEC director general Jeremy Hawksley said: “This is welcome news for the industry and the 1.5 million UK households who use oil for heating. With sustained low prices forecast, we envisage many households using LPG and electricity will look to switch to oil. We may even see some mains gas households changing to oil, particularly if they need to replace their boiler.”
The reduced price of oil is also expected to further dampen demand for the government’s domestic RHI scheme.
The Sutherland Tables showed that the running cost of electricity-driven air-source heat pumps were significantly greater than those of a condensing oil boiler.
Even after taking into account RHI payments, running costs are likely to remain considerably higher.