Heating oil explained - can I use red diesel to heat my home?

Heating oil warms thousands of homes across rural Britain but prices have sky-rocketed in recent days leaving many worried as to how they are going to cope.
By Dave Hammond
Published 10th Mar 2022, 11:03 BST
Updated 11th Mar 2022, 11:10 BST

During the worst of the coronavirus pandemic, as commuters stayed at home and jets were grounded, oil prices dropped to mere pennies per litre - between 15 and 20 pence - however war in Ukraine and the sanctions imposed by the world on Russian gas and oil has sent the oil market into a tailspin.

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Boiler Juice, an online marketplace that claims to find you the cheapest possible price for heating oil using comparison technology - the self-proclaimed market leader in heating oil supplies - had prices in and around the £2 per litre mark this week for a minimum of 500 litres. But it is warning customers that: "Russia's invasion of Ukraine has caused the oil market to become unstable and volatile, impacting crude oil prices in the UK." It adds: "This means pricing and availability are majorly affected."

On its website, it offers 100 litres - enough to last no more than a month for most families - for £205.

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How much tax do I pay on heating oil?

Fuel duty rates vary:

Heating oil prices have soared owing to volatility in the oil market casued by Russia's invasion of Ukraine making the commodity in high demand and at risk of theft.Heating oil prices have soared owing to volatility in the oil market casued by Russia's invasion of Ukraine making the commodity in high demand and at risk of theft.
Heating oil prices have soared owing to volatility in the oil market casued by Russia's invasion of Ukraine making the commodity in high demand and at risk of theft.

Petrol, diesel, biodiesel and bioethanol, for every litre you buy you pay 57.95 pence tax per litre to inland revenue.

LPG for every litre you buy you pay 32p tax.

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Natural gas - often used as fuel in vehicles (biogas, for example) is 25p per litre in tax.

For every litre of heating oil - kerosene - you buy, the government takes 10p in tax which, if removed, would help make one of those 100 litre top up bottles of oil - currently on offer for £205 - £185 provided retailers passed on all of the saving to the customer.

The answer isn't straight forward and - at least in the short term - it will be expensive. If you need to top up your heating oil, it is highly likely that you will pay well in excess of £1.50 per litre so if you are fortunate enough to have plenty in supply, you'd be well advised to be patient. There are providers that offer saving plan options allowing you to set up a standing order to help manage the cost.The answer isn't straight forward and - at least in the short term - it will be expensive. If you need to top up your heating oil, it is highly likely that you will pay well in excess of £1.50 per litre so if you are fortunate enough to have plenty in supply, you'd be well advised to be patient. There are providers that offer saving plan options allowing you to set up a standing order to help manage the cost.
The answer isn't straight forward and - at least in the short term - it will be expensive. If you need to top up your heating oil, it is highly likely that you will pay well in excess of £1.50 per litre so if you are fortunate enough to have plenty in supply, you'd be well advised to be patient. There are providers that offer saving plan options allowing you to set up a standing order to help manage the cost.

What if someone steals my heating oil?

Sadly, heating oil will be targeted by criminals owing to its soaring value. The first thing to do is call your home insurance provider and check with them. Not all insurance policies cover the cost of replacing the lost oil so you must check.

Can I protect my oil from theft?

Oil tank alarms: the answer is yes, but that comes with its own risks. You can buy alarms that monitor the oil level and should a sudden drop in levels occur, you will be alerted, however, you should think very carefully about confronting criminals in the act.

One of the most effective ways of heating your home efficiently is to turn down those thermostats. With spring in the air, many will be able to switch off their boilers altogether but those that cannot should just take a moment to turn down the thermostat to help save you significant amounts of money.One of the most effective ways of heating your home efficiently is to turn down those thermostats. With spring in the air, many will be able to switch off their boilers altogether but those that cannot should just take a moment to turn down the thermostat to help save you significant amounts of money.
One of the most effective ways of heating your home efficiently is to turn down those thermostats. With spring in the air, many will be able to switch off their boilers altogether but those that cannot should just take a moment to turn down the thermostat to help save you significant amounts of money.
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Oil tank locks: you can also buy padlocks and chains to secure the lid to your oil tank, however, we do know that many oil thiefs will - should the tank be locked - punch holes in the tank to drain the oil, potentially leaving you with no oil, plus the cost of a new tank. Again, do check with your home insurance provider as some will not insure the oil if the tank is not locked.

Can I use red diesel in my boiler?

Yes, in theory - technically - you could but you should make a number of checks before you do. First of all the chemical make up the fuels is different - (Kerosene 28 second fuel - - diesel 35 second fuel) and modern boilers will be sensitive to that - you don't want to lumber yourself with an expensive boiler repair bill. Also, that chemical difference makes the emissions quite different and rules around flue positioning vary. If in doubt, contact an expert installation engineer.

When should I buy my heating oil?

Market patterns are showing that heating oil prices are beginning to fall, so may have peaked. The price rises are likely to be as much about customers panic buying as they are about market volatility. However, whilst the world's oil markets recalibrate to the impacts of global sanctions on Russia, it is likely the price will remain high. If you can hold off on buying oil for the time being and have plenty in supply, it may well prove wise to be patient for now.

Related topics:MoneyUkraineBritain

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