Free heating oil tool
For a home needing about 11,426 kWh of heat a year, heating oil at an example price of 70p per litre works out at roughly 7.3p per kWh, or about £840 a year. Mains gas is usually cheapest where available; a heat pump and pellets sit close to oil. Enter your own oil price in the calculator to rank it against your figures.
A home that burns 1,200 litres of kerosene a year needs about 11,426 kWh of delivered heat, once you allow for a condensing boiler running at 92% efficiency. To compare fuels fairly, we work out the cost of one kWh of that delivered heat for each option, then multiply by 11,426 kWh.
At an example price of 70p per litre, oil delivers heat at about 7.3p per kWh, so the year costs roughly £840. On the same home, the cheapest option here is Mains gas (condensing) at about £750, while plain electric resistive heating is the dearest.
Mains gas is normally cheapest where the property is connected to the gas grid, which most oil heated homes are not. Among off grid choices, oil, a heat pump and wood pellets tend to cluster close together, and LPG sits above them. That is why the honest answer to which fuel is cheapest depends heavily on whether mains gas is even an option for you.
| Fuel | Pence per kWh of heat | Yearly cost | Note |
|---|---|---|---|
| Mains gas (condensing) | 6.56p | £750 | grid connected homes only |
| Heating oil (kerosene) | 7.35p | £840 | at an example 70p per litre |
| Wood pellets (bulk) | 8.07p | £922 | automated pellet boiler |
| Air source heat pump | 8.86p | £1,012 | SCOP 2.9, competent install |
| LPG (bulk) | 9.33p | £1,066 | off grid, condensing boiler |
| Electric (resistive) | 25.70p | £2,936 | panel or storage heaters |
Delivered-heat basis, so boiler and heat pump efficiency are already included. The oil row uses an example price; other fuels use the dated sources listed in the figures table below. Running cost only, upfront and standing costs are separate.
cost_per_kwh_heat = fuel_price / (energy_content * efficiency)
Oil: 70p / (10.35 kWh/L * 0.92) = 7.35p/kWh
Gas: 5.9p / 0.9 = 6.56p/kWh (Ofgem cap 1 July to 30 September 2026)
LPG: 8.4p / 0.9 = 9.33p/kWh (Sutherland Tables Jul 2026)
Pellet: 7.1p / 0.88 = 8.07p/kWh
Heat pump: 25.7p / 2.9 (SCOP) = 8.86p/kWh
Electric resistive: 25.7p / 1.0 = 25.70p/kWh
annual_cost = cost_per_kwh_heat / 100 * annual_heat_kwh
(example uses 11,426 kWh) | Figure | Value | Source | Verified |
|---|---|---|---|
| kerosene kwh per litre | 10.35 kWh/L | UK Government GHG conversion factors 2025, burning oil (net CV) | 2026-07-28 |
| boiler efficiency condensing | 0.92 ratio | SEDBUK band A typical seasonal efficiency, OFTEC technical guidance | 2026-07-28 |
| gas p per kwh | 5.9 p/kWh | Ofgem energy price cap, 1 July to 30 September 2026, gas unit rate, direct debit | 2026-07-28 |
| gas boiler efficiency condensing | 0.9 ratio | SEDBUK band A typical seasonal efficiency for a condensing mains gas boiler | 2026-07-28 |
| lpg p per kwh | 8.4 p/kWh | Sutherland Tables, Great Britain average bulk LPG, July 2026 | 2026-07-28 |
| wood pellet p per kwh | 7.1 p/kWh | Sutherland Tables, wood pellets bulk blown, July 2026 | 2026-07-28 |
| wood pellet boiler efficiency | 0.88 ratio | MCS and biomass boiler manufacturer typical seasonal efficiency for a bulk-fed pellet boiler | 2026-07-28 |
| electricity p per kwh | 25.7 p/kWh | Ofgem energy price cap, 1 July to 30 September 2026, electricity unit rate, direct debit | 2026-07-28 |
| heat pump scop realistic | 2.9 ratio | Energy Systems Catapult Electrification of Heat field trial, median ASHP SCOP | 2026-07-28 |
Whether mains gas is available. This is the single biggest factor. Most oil heated homes are off the gas grid, so the cheapest option on paper is simply not on offer. Compare only the fuels you can actually get.
The oil price on the day. Oil moves with the crude market, so its position in the ranking shifts. When oil is cheap it can undercut a heat pump; when oil is dear the heat pump and pellets look better. This is why the tool asks for your own price rather than assuming one.
Appliance efficiency. A worn non condensing boiler wastes fuel, so its real cost per kWh is higher than the table shows. A well installed heat pump beats a badly installed one by a wide margin.
Standing and upfront costs. LPG often carries tank rental, a heat pump has a large install cost partly offset by a grant, and pellets need storage and handling. Running cost per kWh does not capture any of this.
Your electricity tariff. The electric and heat pump figures use the Ofgem cap. A cheaper time of use tariff, or solar, can cut those costs. A premium tariff pushes them up.
If oil is your best option, or you are staying with it for now, compare prices for your postcode.
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