In the first of a series of posts on home heating oil, we wanted to give our customers – and the wider public – a greater understanding of the oil industry, how it works and how it can affect you. First up, we look at the main factors that influence the cost of home heating oil.
What You Need to Know
At Emo Oil, we strive to always give our customers a premium class service at fair and competitive prices. Our control over these prices is restricted by a number of external factors. Read on to discover the main ones:
7. The price of crude oil
Both Kerosene and Gas Oil are crude oil products. If the price of international crude oil rises, then home heating oil prices normally follow. The price of crude oil is affected by its own factors – the cost of production, the cost incurred from storing it safely, structural framework changes including changes in the legal and tax frameworks of oil exploration and extraction. These costs all add up and unfortunately can lead to higher prices for the end consumer.
6. Euro-Dollar Exchange Rate
Crude Oil is traded by barrel in US Dollars, therefore a strengthening dollar versus the Euro will generally lead to an increase in prices. Conversely, a weakening dollar normally results in price decreases.
Whenever we provide a quote for Emo home heating oil, the price quoted shows the cost per litre of oil including VAT, which for domestic heating is currently at 13.5%. Any increases in VAT will unfortunately mean an increase in the cost to consumers.
4. Supply and demand changes
Global supply and demand relationships also impact the price of a home heating oil top up. For example, when President Trump was appointed, plans were set in motion to drastically increase US oil production. This had an impact on global oil prices. At Emo we track these indicators daily to keep on top of the best sources of oil in the short-medium term.
3. Cost of delivery and distribution
With any product there are costs to bring it to the distribution point and deliver it to end users – home heating oil is no exception. Increases in crude oil prices tend to have a knock-on effect on transportation costs which in turn will raise the cost of bringing home heating oil to our customers. Wherever possible Emo aim to group deliveries to locations close to each other, saving on transport costs. These savings are then passed on to customers.
2. Political upheaval
Conflict in oil-producing countries causes global unrest and uncertainty. Any risks relating to oil supply will cause the cost per barrel to creep up. For example, in the recent past disputes between Baghdad and Iraqi Kurdistan over independent oil sales caused oil output to drop significantly by about 150,000 barrels per day.
And finally – the one factor Emo customers have control over…
1. The size and frequency of orders
The more oil ordered in one delivery, the less customers pay per litre for that delivery. For customers with larger oil tanks it is always recommended to order as much as they can afford at the time, to benefit from economies of scale. Ordering a smaller top-ups will likely result in paying more for home heating oil over the longer term. So, always best to think ahead.
Find out more at www.emo.ie