Heating oil price still rising

26 October 2007

The price of heating oil is continuing to rise dramatically, according to a new US government report.

Figures compiled by the Energy Information Administration showed that the average cost of heating oil to residential customers increased by 7.4 cents to 286.8 cents (£1.40) a gallon last week, meaning the price is now 48.3 cents higher than 12 months ago.

The report also indicated the amount paid by end users is set to continue rising, as the wholesale price is still growing and the country's stockpile of heating oil is dropping ahead of the peak demand of the winter months.

In the UK the average cost of heating oil has risen by around 17.5 per cent in the past six months.

Prices often rise sharply when demand increases during the winter - in 2006 the cost of heating oil in the UK increased by just under ten per cent between late October and mid-December - and that is likely to happen this year, as crude oil prices have reached record highs in recent days.

As a result, heating oil customers may find that they can save money by buying their winter supplies as soon as possible, before the price rises still further.