The independent findings were published by the Sutherland Tables which compare the annual space and water heating costs for different technologies in an average three bedroom property.
The latest figures for Great Britain reveal that, between June 2020 and June 2024, the average yearly running cost for a condensing liquid fuel boiler was £1,231. LPG condensing boilers were 31% higher, at £1,620, whilst electric storage heaters were more than double the cost, at £2,866.
Liquid fuel heating was also slightly cheaper than gas condensing boilers, which averaged £1,283, and was also cheaper than renewable options, such as wood pellets or heat pumps.
In Northern Ireland and the Republic of Ireland, liquid fuel was also the cheapest form of domestic heating over the same period, averaging £1,161 and €1,640, respectively.
Malcolm Farrow, head of public affairs at OFTEC, commented: “These new figures will be welcome news for the 1.7 million UK homes that rely on liquid fuel for their heating, particularly at a time when we have all experienced a squeeze on household spending. Like all energy prices, liquid fuel was not immune to price fluctuations due to the Covid pandemic and the war in Ukraine. However, the four-year average dispels the myth that liquid fuel heating is an expensive option. Prices are also expected to stay competitive with other fuels over the coming months.”
The findings have been published as the new Labour government develops its proposals for decarbonising the domestic heating sector in line with the UK’s net zero commitments. In the election campaign, the party committed to scrapping the proposed 2035 date for banning the installation of new fossil fuel boilers.
Affordable, low carbon alternative
It followed concerns from rural MPs about the high costs many of these households could face if they had to transition to other types of heating, such as a heat pump. Off-grid homes are typically older with poor energy efficiency and often require expensive and disruptive changes for the heat pump technology to work effectively. If these changes aren’t made, households could face significantly higher running costs.
To offer more choice, OFTEC, along with industry partners, is urging the government to support the rollout of renewable liquid fuels by equalising the tax duty with kerosene, when it is used for domestic heating, and setting up a supplier fuel obligation. The trade association argues this will provide an affordable, low carbon alternative for oil heated homes who would be able to transition with minimal cost and disruption.
The renewable liquid fuel Hydrotreated Vegetable Oil (HVO) has been effectively demonstrated in just under 150 properties over the past two years and reduced emissions by 88% following minor modifications to their boilers. The industry is also assessing a phased approach through blends so the fuel could be rolled out more quickly.
Malcolm added: “Whilst households on oil heating have enjoyed the lowest heating costs over the past four years, we must recognise the need to transition these properties onto a lower carbon alternative to support the UK’s net zero commitments.
“Heat pumps are an excellent solution for some properties but, for others, renewable liquid fuels may offer a more pragmatic and realistic choice. And, if the government corrects the current fuel duty disparity and implements a fuel obligation, options such as HVO can provide a long term, affordable solution for decarbonising buildings in the off-grid sector that currently rely on traditional oil heating.”
Image credit: OFTEC