When we think about the term like domestic heating oil the name of kerosene comes first among the people of different households and businesses of the UK. This is a special need for the people who have to face high levels of price for different alternative fuel sources. There is a need to have an awareness of what makes an impact on the prices of this fuel to maintain the balance in the budget.

Unlike some of the fixed price ranges of different categories of products, the price of kerosene goes up and down due to the changes in the trends of the market. There are also various regional and global factors that affect the price of this fuel. In general it can be said that you can get a high price in the cold months when the demand is high and the price can be low in the off-season when the demand is low.

This article will delve into the facts of what situations impact the kerosene heating oil prices. 

Kerosene Price And Market Demand

Let’s discuss first how kerosene prices are affected by various market demands. In countries like the UK, the price of kerosene changes as per the ratio of production in different regions. The fuel is also coined as the 28-second fuel and this has become a significant choice for people as it has low levels of freezing points. Different industrial and residential mechanisms work properly by using this fuel. For the year 2023, the country UK saw a rise in the use of this oil among the people more than 4% than that of 2022.

Ranges of price: In the UK the price range of this fuel is based on the public demand, their location, the condition of the weather with the cost of delivery. It is also affected by the price of crude oil that is being marketed and sold in dollars. The price of heating oil for end customers in the UK will not reflect the price of the dropping barrel in a scenario where the superior exchange rate is weak.

Seasonal demand and price: The value of the fuel like  kerosene can have a deep impact on public demand. In the year 2023, the country UK imported oil in the amount of 18 million tonnes due to its high demand and the import showed a rise of 15% from the year 2022. The people of this country get a notable price hike in this fuel during the time of winters or in December. 

OPEC: The OPEC can also have a significant effect on the heating oil prices. OPEC prepares the quotas for the production of fuel for its member countries. When the production goes down the prices increase. The organization also makes the co-ordination for the supply cuts when the price goes too low. For the time-frame of 2024, the price of fuel as per  OPEC was $80.48/barrel.  

Price added with VAT: The range of fuel prices in the UK is being influenced by both the VAT and fuel duty. In this country, the prices for domestic fuel are added with 5% VAT and the other fuels are added with the VAT rate of 20%.

Price as of 2024: For the time-frame of 2024 the domestic heating oil prices were nearly 70 pence for one liter and the average price of the other fuels within the last six months was 61 pence for one liter in addition to VAT.

Price of 500 liters: When you buy the kerosene in the amount of 500 litres its price can be based on the suppliers. In companies like Compass Energy you can get the fuel at a reasonable price.With this, as per the supplier like WCF channels the price of 500 litres kerosene can be $218.94 with the charges of VAT. On the other hand, the average price of kerosene as per Boiler Juice can be 64.37 pence for one liter in addition to VAT. 

Fuel Duty and sales of kerosene: In the UK the rates of fuel duty have 16 different segments. They begin with 7.2 PPL and reach 62.67 pence for one litre. The fuel duty of the kerosene that will be used in some particular machines can be rebated from this charge.

Factors That Affect The Price Of Kerosene

Several factors make an impact on the heating oil prices. They can be the rules and policies of the government and the demand in the local and regional areas.

The level of supply and demand: The law of the demand and supply of fuel like kerosene says that when there is an increase in the supply the heating oil prices will come down and when there is an increase in the demand the price will increase. The demand of this fuel can be for residential use, use for commercial and agricultural purposes. This is applicable in all regions and locations of the UK. For the time frame of  2024, the energy used  by the people of the UK was 6% less. This happened  as the weather was more warm and the price of the fuel was also high in different regions. 

Demand in different seasons: The price of heating oil will also depend on the season. In the UK people of nearly 1.5 million homes make more demand for kerosene in winters. This fuel is high in demand in many of the rural businesses in all seasons.

Geopolitical factors: Different factors like geopolitical relations and political conflicts make an impact on fuel prices. They can be like the BREXIT issue and war of Russia and Ukraine.

Production and price of crude oil: The kerosene prices are also being affected by the production, consumption, and import of crude oil. In  the time-frame of 2023 the country UK had produced crude oil of nearly 795,000 barrels each day. In a year a household of the UK uses the fuel nearly 1700 litres to 1800 litres. 

Spreads in retailing of kerosene: In the UK the retailing of different fuels  also makes an impact on kerosene prices. This can be checked by the different fuel management services and making comparisons of prices on different websites. The fuel retailer should be registered with HMRC if it is retailing the fuel more than 2500 litres.

Fuel margins: The fuel margins can be the difference between the payment done by the retailer and the payment by which it is sold. In the UK the fuel margins for supermarkets have seen an increase from 7% to 8% in the time-frame of 2024.

Cost of fuel refinement: In the UK the price of heating oil like petrol after refining was nearly  10 ppl for the time frame of 2021 and for the year 2022 the cost after refining was for 35 ppl.

Greenhouse gas obligations: The price of kerosene and similar fuels is also connected to the GHG obligations. The UK has the aim to become completely free from CO2 emissions by the time-frame 2050. They are also working for different ranges of carbon budgets.

Development of fuel obligations: The UK has also worked for the development of fuel obligations or dFO. This is a segment of the Renewable Transport Fuel Obligation. With this, they work for different processes and new technologies in fuel production.

Tips To Have Excellent Prices Of Kerosene

You can work with different initiatives to get the excellent level of  kerosene prices when you go to purchase it. The price of kerosene can be dependent on the type of supplier. If the supplier gives a comfortable price you can buy it in bulk.

Cheque the weather and make the demand: Cheque and find out if the weather outside needs heating or cooling for the inner area of your home. If it is cold outside, you can demand furnace fuel.

Compare suppliers and prices: Also, identify your fuel needs and request pricing quotes from different dealers. Then, compare the TCO or total cost of ownership. You can also use a price comparison template.  The government of the UK has organised and regulated the price for  retail selling  of petrol, diesel, PDS kerosene and LPG for domestic use. 

The bulk buying process: Work on making a plan for bulk buying. For this, you need to cheque your assets or inventory, prepare a budget, and do research about the suppliers. Also, cheque what transport and logistic facilities the dealer has for the delivery of fuel in bulk.

Manage to have a well-reputed fuel dealer: The heating oil dealer should have a good reputation among its all suppliers and users. The customers should give positive views and reviews about them.

Know the Foreign exchange rates: The  heating oil prices in the UK are also influenced by the currency rate between dollars and pounds. The price of this fuel, like gasoline and diesel, increases when the pound weakens. 

The Bottom Line

The kerosene prices have the impact of both the local and global issues. These are added with the prices of crude oil, different geopolitical factors, demand as per the season, and availability of transportation in the local areas.

 By having the awareness of these factors both the users and the dealers can make the perfect decisions. The change in the season becomes the most common factor for changing the fuel costs.

To have the best result and best deal you also need to make an analysis of different trends of the market and face different challenges. You also need to work on the use of modern digital technologies.

Taking expert advice and checking online reviews and ratings can be a good option to find a reliable dealer with a reasonable price.