Why is heating oil cheaper in some parts of the UK?

What the CMA found

The Competition and Markets Authority (CMA) studied heating oil across the UK in 2026. Using suppliers' order data from January and February 2026, before the Middle East conflict pushed prices up, it found prices in Scotland averaged around 7% above the UK average, Northern Ireland had the lowest prices, and England and Wales sat in between.

It put the gap down to costs, not profits: although its evidence on profits by area was limited, it did not find that suppliers serving regions with more remote areas and fewer suppliers, such as Scotland, made systematically higher profits. It also found that price differences within a region, or within one type of area such as rural areas, are generally as large as or larger than the differences between regions or types of area.

That is why a national figure such as today's average price, 114.1p a litre ex VAT for 1,000 litres, is only a starting point. It is the median across many listings, so your own price can sit above or below it.

Distance from terminals and refineries

Suppliers told the CMA that wholesale kerosene is usually dearer where there is no large terminal or refinery nearby, because they have to buy from smaller ports or rail-fed sites with longer supply chains. One said the large import terminals on the east coast, fed mainly from Antwerp, Rotterdam and Amsterdam, can be cheaper.

The UK now relies more on imports. After the Grangemouth and Lindsey refineries closed in 2025, four refineries remain, three of which make heating kerosene. Grangemouth is now an import terminal and the main source for Scottish suppliers. Terminals in the north of Scotland are more exposed to bad weather and to temporary closures: the CMA notes that Aberdeen, Peterhead and Inverness closed for two weeks in January 2026.

Rural roads, islands and depots

Delivering to remote homes means longer drives, narrow lanes that need smaller tankers, weather disruption and, for islands, ferry fares and extra time. Where there is no wholesale supply point nearby, suppliers may keep their own storage depots, as in the Scottish Highlands and mid-Wales, which adds cost. One supplier told the CMA that a route in the remote Highlands might manage 8 to 10 deliveries in a day, against more than 20 in busier parts of England or Northern Ireland.

How many neighbours use oil

How close together oil-heated homes are makes a big difference. More than 60% of households in Northern Ireland use heating oil, so tankers make more drops per mile, and every postcode district there is served by at least five suppliers. Scotland averages about 2 oil-heated households per square kilometre, against 6 in England and 5 in Wales.

Density works in towns too. Where few homes use oil, traffic and labour costs can make deliveries slow and expensive, so some urban customers pay more than rural ones.

What this means for your price

Because prices vary so much inside each region, comparing the suppliers who deliver to you matters more than where you live. A few things also help the supplier's costs, and so your price:

• Allow some flexibility on the delivery date, so your order can join a round the supplier is already running.
• Order with neighbours or through a buying group to put more drops on one trip.
• Order a larger amount where you can, so the delivery cost is spread over more litres.

The quickest check is to compare prices for your postcode.