Heating oil prices are still on the decline according to the latest data from the Sutherland Tables, which show that oil is now 13% cheaper than mains gas to heat the average three bedroom home, at around £930 per year. This compares to an annual heating bill of £1072 for the same home on mains gas, the second cheapest option.
Jeremy Hawksley, OFTEC
Comparing the equivalent heating costs for LPG and electric storage heaters – the other main heating methods used by off gas grid households – oil comes in at 42% cheaper.
It is predicted that oil prices will remain low for the foreseeable future, welcome news for the industry which has already seen sales of oil condensing boilers rise by 7% in the first quarter of this year compared to 2014.
“Oil prices have now fallen to their lowest point since autumn 2009 and are currently over £500 cheaper than when prices peaked in the early summer of 2013,” says Jeremy Hawksley, Director General of OFTEC.
“We anticipate many households currently using LPG and electricity will consider a switch to oil. Making the change could save LPG users around £700 per year – or over £1000 if their boiler is a standard efficiency model. Even allowing for the cost of a new oil boiler and tank, the move would provide considerable savings over the lifespan of the installation.”
OFTEC suggests that the continued drop in oil prices will dampen demand for the Government’s domestic RHI scheme. With cost remaining a key driver for most consumers, there is less incentive for oil using households to switch to renewables, given the high up-front costs of installing these technologies.
“DECC’s own figures show just 11,149 new renewable heating systems were installed under the RHI in its first year of operation, falling drastically short of the estimated 10,800 installations required each month to meet the government’s ambitious target of 750,000 installations by 2020,” adds Jeremy Hawksley.
