Why delivery costs more
The Competition and Markets Authority's 2026 study of the heating oil market heard from distributors that remote and island homes cost more to serve, for several reasons:
- longer journeys to collect oil from wholesale supply points
- longer distances between customers, so fewer deliveries per round
- smaller tankers needed for narrow roads
- ferry fares and the extra time to reach island communities
- weather that disrupts supply routes, to which island deliveries are particularly vulnerable
- the need to keep oil in local storage depots where there is no wholesale supply nearby, as in parts of the Scottish Highlands and mid-Wales
One distributor told the CMA a remote Highlands round may manage 8 to 10 deliveries in a day, against more than 20 in busier parts of England or Northern Ireland. The CMA found the Highlands and Islands have the fewest distributors in Scotland, and the Isles of Scilly, with an estimated fewer than 100 oil-heated homes, were the only council area where it identified just one distributor. It concluded that higher prices in remote areas largely reflect the higher cost of supply rather than weak competition.
Order earlier than you would on the mainland
On an island, a delivery depends on the ferry and the weather as well as the supplier's round. Order while you still have a good margin left, and before winter weather sets in. UKIFDA, the distributors' trade body, advises telling your supplier when you expect to run out so they can prioritise, and ordering early so you are ready for bad weather. Each price on Fueltool shows its delivery option and date, so you can see how long oil will take to reach you.
Order larger, or order together
Fewer, larger deliveries suit remote supply. On Fueltool's figures today, 1,000 litres works out 1.4p a litre less than 500 litres, and a larger tank lets you take bigger deliveries less often; see what size tank you need. The CMA noted that neighbours coordinating their orders, for example through a buying group, can make each trip go further. Our guide to oil buying groups explains how they work, and tanker access covers narrow lanes.
VAT on islands
| Where | VAT position |
|---|---|
| Scottish islands, Isles of Scilly, Anglesey, Isle of Wight and other UK islands | Part of the UK, so UK VAT applies as on the mainland |
| Isle of Man | Outside the UK but treated as part of it for VAT, with VAT charged under Manx law |
| Channel Islands (Jersey and Guernsey) | Outside the UK for VAT, so UK VAT does not apply; HMRC notes there is no VAT there |
Totals on Fueltool are shown with 5% VAT. If you live in the Channel Islands, ask the local supplier how their price is taxed.
Help with costs
As of October 2026 we could not confirm any scheme that pays towards the extra cost of delivering oil to islands or remote areas. Help with heating oil bills in 2026 has been aimed at lower-income and vulnerable households and run through councils, the devolved governments and advice services; our guide to help with heating oil costs has the details. To see prices and delivery dates for your address, compare prices for your postcode; if no supplier covers it yet, you can leave your email address and get one message when it is covered.
Common questions
Is there VAT on heating oil in the Channel Islands?
UK VAT does not apply: HMRC treats the Channel Islands as outside the UK for VAT and notes there is no VAT there. Ask the local supplier what tax, if any, is included.
Does the Isle of Man pay VAT on heating oil?
VAT applies. HMRC says the Isle of Man is treated as part of the UK for VAT, with VAT charged under Manx law, which generally mirrors UK law.
Why do some islands have only one oil supplier?
Small islands have few oil-heated homes and high delivery costs, so few distributors serve them. The CMA's 2026 study identified only one distributor serving the Isles of Scilly.
When should I order heating oil on an island?
Earlier than on the mainland. Order while you still have a good margin left, before winter weather and ferry disruption, and tell your supplier when you expect to run out.
Sources
- CMA: Heating oil market study, final report (15 July 2026)
- GOV.UK: UK's heating oil households need stronger protections, says CMA (15 July 2026)
- HMRC: VAT on goods exported from the UK (VAT Notice 703)
- HMRC: VAT place of supply of goods, territory of the United Kingdom (VATPOSG2300)
- UKIFDA: Help and advice
Prices on this page are Fueltool's live figures for 25 October 2026: the typical (median) listing for standard heating oil, before VAT unless it says otherwise. How they are worked out.
Today's price
Typical heating oil price today: 114.1p a litre before VAT, about £1,198 for 1,000 litres with VAT.
See today's prices