Boost for customers as price of heating oil falls significantly, and more cuts may soon be on the way

New figures show that the average cost of kerosene was down by more than €200 for 1,000 litres to €1,048. This is a fall of 16pc since the previous year, according to an analysis of the market by comparison site Oilprices.ie.

Falling prices last year are in marked contrast to 2022 when prices shot up by 50pc. In the previous year, the 1.5 million households that use heating oil were hit with a 80pc surge in costs.

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Eamonn Mulvihill of Oilprices.ie said the €200 reduction in the cost of 1,000 litres of heating oil would be welcome.

“It’s a small drop, but it will give buyers some hope that the price will continue to fall.”

He said international events had strongly shaped oil prices in recent years. Both the Covid pandemic and the war in Ukraine had been major influences. The situation in Ukraine and the sanctions on Russian oil still affected oil prices in 2023, but the year saw a return to a more normal market, Mr Mulvihill said.

Prices in 2023 were determined by changes to the international crude-oil price and by global demand for oil.

He said the carbon tax increased in May last year by €7.50 a tonne of carbon dioxide emitted, from €41 to €48.50. This added around €21 to an order of 1,000 litres of kerosene.

The analysis shows that heating oil tends to be cheaper around cities, especially Cork and Dublin, and more expensive in remote areas.

Mr Mulvihill said: “We’ve seen price differences across the country of up to €150 – largely because of increased competition in the cities, and the higher cost of delivery in rural areas.”

The analysis also shows that it is a myth that heating oil is cheaper in the summer and more expensive in the winter.

“In fact, oil prices are driven by the global economy – and the weather in Ireland makes very little difference.”

The report points to huge variations in prices. During the last two years 1,000 litres has cost as much as €1,550 and as low as €330.

Mr Mulvihill said this means people buying heating oil would be wise to keep an eye on the price.

Household heating oil usage varies from around 1,300 litres a year in a three-bedroom house to 2,600 litres for a five-bed house.

“Unfortunately, it accounts for a quarter of Ireland’s CO2 emissions, so it’s important to use heating oil efficiently,” Mr Mulvihill said.