Energy price cap rises again – what does it mean for heating oil households?

Ofgem just announced a further 4% increase in the price cap for electricity and gas to £1,723 per year, costing an average home £60 more from October 1st. Ofgem states "This increase reflects higher wholesale gas prices as a result of the ongoing conflict in the Middle East, with volatile global gas markets remaining the dominant driver of price changes.".

The Government's decision to remove VAT on domestic electricity is reflected in the price cap update.

But how does that compare with heating oil? It’s difficult to compare heating costs for off-grid vs on-grid homes, as the kerosene price is always moving and households buy it when they need it, not on contract.

Here’s as close a comparison as you’ll find and, what’s even better, we’ve got a first-of-its-kind opportunity for you to save even more on your off-grid energy. Be ready to write down the details in just a moment.

Are heating oil homes getting a good deal now?

The high cost-of-living, in particular high food and energy costs, have been the status quo now for years. Ofgem's announcement was expected due to the continued situation in the Middle East and we can roughly break down the £60 annual hit for a “typical household” from October 1st into its gas and electricity components.

• Electricity costs should see a slight reduction (removal of VAT)
• Gas costs up around 8% a year

Off-grid homes in theory wouldn't have much of a hit due to not using gas, but what about gas vs heating oil?

Assuming the “typical household” off-grid uses 1,500 litres of heating oil annually (estimates vary from 1,200 to 1,800) and we use today’s average heating oil cost of 91ppl (incl. VAT), we get as close a comparison as possible between the heating costs of gas from October 1st and an oil order today.

Heating oil being a bit more expensive now, may come as no surprise given how heating oil prices have reacted to events in the Middle East but for the same heat production, gas and heating oil are actually quite close. This gap is much closer than it was after the July Ofgem price cap update but still a switch compared with February.

In more "normal" times this wouldn't be the case, the cost of heating oil (for the same heat production) is normally cheaper than gas, mainly because heating oil has no “standing charge”. Usually the only reason the typical household heating cost is higher for off-grid compared to mains, is the average oil home is more rural, older, larger and so requires more heating per year.

The obvious caveat is these prices will change. In 3 months’, a new price cap will be announced, and heating oil prices will change constantly, so stay up to date with our price alert emails. However, right now, this gives you a clear comparison.

We’ve created a permanent price cut for heating oil

What if we could discount 4 pence per litre off all your oil orders, forever. Sounds too good to be true right?

It’s here. The UK’s first home essentials package designed solely for off-grid homes to simplify your life with fewer bills.

Our mission has and always will be helping off-grid customers save on their essentials.

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How does it work? And how do I join?

We’ve teamed up with the award-winning Utility Warehouse to get the best off-grid utility package in the UK. A first-of-its-kind. And exclusively, not only can you save on electricity, broadband and mobile, but you’ll also get up to 4 pence per litre off your heating oil. 1 pence for each utility service that you include in your bundle.

For a household using roughly 1,800 litres per year that’s around £70 a year saving on heating oil alone!

Heating oil savings are just the tip of the iceberg, you could also save £100s with combining your essential utilities as well.

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