The Ups and Downs of the Oil Price 

Friday 1st May 2020

If you have a home or business off the gas grid in rural Derbyshire you are probably at the mercy of oil companies.   

The price has gone down significantly in the last few weeks.   

Since we have been running the oil buying scheme (November 2011) we have seen the price as high as 62.27 pence per litre (ppl) in February 2013 to the lowest price of 17.00 ppl last week (28th April 2020). When comparing the total cost for the minimum order quantity of 500 litres that’s £326.92 at its high compared to £89.25 last week – a difference of £237.27*.    

The price can vary due to the global picture such as the cost of crude oil, exchange rate (60% of kerosene for the UK market is imported) and the fact that the kerosene used for domestic heating oil is also in demand as aviation fuel, which until recently has consumed significantly more kerosene that the domestic heating oil market. 

The other, more local influence on price is demand. Periods of high demand can create temporary supply shortages which can push prices up especially for unplanned domestic deliveries.  

We saw this in March as the lockdown was introduced, panic buying pasta and loo paper also spread to heating oil. The global price dropped, but local demand rose significantly so the price did not drop to the same extent in line with the cost of crude oil.  

The weather is also an obvious factor – if it’s cold the demand increases and if it snows the demand goes crazy.  

If you order oil direct from a supplier (local or online), you will get a better ppl price the more you order. However, the downside of this is that you are ordering a greater quantity so it’s a much bigger one-off hit to your cashflow.  

If you buy oil through our Community Oil Buying Scheme, the ppl is the same whether you are ordering 500 litres or 2000 litres. Many of our members prefer to spread the cost of their oil buy ordering 500 litres at any one time – more gentle on the bank balance. 

You can REGISTER here. For any questions contact me on 07540 736118 or email [email protected].

*(As a very rough benchmark, looking at the average cost of oil 500 litres would usually cost a bit over £250.)