Home heating – living with what we have...

Our home is fitted with a ten-year old Worcester 15/19 oil-fired combination boiler which provides the heating and hot water.  Where we live, the other three houses also use domestic heating oil as a fuel source.

Unfortunately, domestic heating oil (kerosene 28) prices tend to fluctuate wildly in line with the world oil price.  There was also a step change in kerosene prices just a few years back, with the costs jumping by 50% from around 40p to 60p per litre in just a few weeks during a particularly cold winter period, even peaking at around 75p in some locations for a short time, and nationwide they've never fallen too far below the 60p level since.   Oil prices also suffer much more from 'downward price rigidity' than any other domestic fuel source, i.e. prices are quick to jump upwards on an oil price rise and very, very slow to fall when global oil prices fall.

Added to the facts that the UK domestic heating oil market is totally unregulated (sorry, I said no politics here...) and that most of the country's supply and distribution is in very few hands so that effective competition is non-existent, then those of us with oil-fired heating must simply endure huge annual costs, typically at least a third more than those with equivalent homes using natural gas. 

So what are the options ?  Let's base the comparisons on our annual heating and hot water costs of £1,500, which is an accurate reflection of the costs of last year's oil tank fills.

By way of an Introduction...

I can hear you yawning already – not another self-righteous blog by some rich git about how it's possible to live cheaply by boiling the snails you find in the garden, making fuel briquettes from animal dung, eating roadkill and generally reverting to a standard of living which was tough enough in the seventeenth century.....hopefully you'll find a bit more than that to engage with in this blog.

I'm a Chartered Engineer, but I'm also a time-served Fitter from an apprenticeship in heavy engineering (honestly, such industries did exist in the UK in those days), having gone on to university much later in life than most, after I'd already been working for around 10 years or so.

After a series of staff jobs (i.e. as an employee), I formed my own consultancy company initially as a tax-efficient way of continuing to do long-term contract work for the same sort of companies as I'd worked for in the past.  IR35 wasn't even a glint in Dawn Portillo's eye at that time (for the unenlightened, under the current IR35 legislation in the UK, those working full-time as a contractor for a single employer are subject to complex rules which effectively compels them to account for their own company's earnings in a specific way and to pay basically the same total amount of taxes as they would if they were a direct-hire employee).