Heating Oil Prices Have Doubled – and Record Numbers of Oil Homes Are Switching to Heat Pumps

Heating oil is 111.52p a litre – more than double a year ago

On 9 October 2026, the UK average price for 1,000 litres of heating oil was 111.52p a litre, according to BoilerJuice’s daily price index. That’s before the 5% VAT you pay on heating oil at home, which takes it to about 117p a litre.

Exactly a year earlier, on 9 October 2025, the same index stood at 53.21p a litre.

Here’s what that means for a 1,000-litre delivery, including VAT:

• October 2025: about £559
• October 2026: about £1,171

That’s around £612 more for the same delivery.

Most homes need more than one, too. BoilerJuice says typical UK homes use 1,500-2,000 litres a year. At today’s price, that’s between about £1,756 and £2,342 a year, compared with about £838 to £1,117 a year ago.

Please note: these are national averages. The price you pay depends on where you live, how much you order and your supplier.

Record numbers of oil homes are switching to heat pumps

Since 21 July 2026, homes heated by oil or LPG with no mains gas connection have been able to get £9,000 towards an air source or ground source heat pump through the Boiler Upgrade Scheme. That’s £1,500 more than the standard grant.

Demand has soared:

• A record month for applications. 8,150 households applied for the grant in July, the most in any month since the scheme opened. That’s up 81% on June and 112% on July 2025, and the government says more interest from heating oil households helped drive the rise (GOV.UK).
• A record month for installations. In August, a record 3,238 grants were paid out for air source heat pumps; that’s 40% more than in August 2025 (Energy Live News, reporting government figures).
• Rural homes are leading the way. Since the scheme opened, 49% of its grants have gone to rural households and 38% to homes off the gas grid (GOV.UK).

It’s a fitting backdrop for National Heat Pump Week, a new campaign from the Heat Pump Association and Nineteen Group that runs from 12 to 16 October.

Oil or heat pump: what would it cost to heat your home?

Let’s put some numbers on it.

For this worked example, we’ve assumed a home that uses 1,500 litres of heating oil a year – the lower end of BoilerJuice’s typical range. We’ve also assumed an oil boiler that turns 85% of the fuel’s energy into heat, and a heat pump with a seasonal efficiency (SCOP) of 3. These are round figures for illustration; your home, boiler and heat pump will be different.

Note: SCOP is simply how much heat a heat pump gives you for each unit of electricity over a whole year. A SCOP of 3 means 3 kWh of heat for every 1 kWh of electricity.

Heating oil at about 117p a litre

A litre of heating oil holds about 10.35 kWh of energy (Rix), so 1,500 litres is around 15,525 kWh. At 85% efficiency, that gives you about 13,200 kWh of heat.

At about 117p a litre including VAT, 1,500 litres costs about £1,756 a year. That works out at around 13.3p for each kWh of heat.

A heat pump at the price cap rate

From 1 October 2026, Ofgem’s price cap sets the average electricity unit rate at 26.32p per kWh for households paying by direct debit. That includes the removal of VAT from electricity between 1 October 2026 and 31 March 2027. You can read more in our article on the electricity VAT cut.

To make the same 13,200 kWh of heat with a SCOP of 3, a heat pump would use about 4,400 kWh of electricity. That costs about £1,158 a year, or around 8.8p for each kWh of heat.

So, in this example, the heat pump costs about £600 a year less to run than oil at today’s price.

Two honest caveats

• The gap depends on the oil price. At last October’s price of about 56p a litre including VAT, the same 1,500 litres would have cost about £838 – less than the heat pump in this example. What’s changed is the oil price, and nobody can tell you where it will go next.
• The VAT cut on electricity is temporary. If 5% VAT returns after 31 March 2027, the heat pump in our example would cost about £1,216 a year at today’s unit rate. That’s still around £540 less than oil at today’s price.

A heat pump tariff or solar panels can bring the running cost down further. Want to try your own figures? Our Heat Pump Savings Calculator works out what a heat pump could save you.

Our view at Infinity Energy Services

A spike in the oil price isn’t a reason to rip out a boiler that’s working well.

But oil boilers don’t last for ever. If yours is getting old, or you’ve been thinking about a heat pump anyway, the timing has rarely been better. The grant is £9,000 for oil and LPG homes until 31 March 2027, and there’s no VAT on the installation until the same date.

Then there’s control. With oil, your heating bill depends on the price of crude oil on the day you order. With a heat pump, it depends on your electricity tariff and, if you have them, your own solar panels. On the price cap, electricity prices are set in advance every three months.

That doesn’t mean electricity prices never rise. But a heat pump needs far less energy to make the same heat: in our example, about 4,400 kWh of electricity instead of around 15,525 kWh of oil.

We install Vaillant and Grant air source heat pumps across Hampshire, Dorset, Wiltshire, Berkshire, Surrey and West Sussex. We’re MCS-certified, so we apply for your grant for you. If you live in Hampshire, see our page on heat pump installers in Hampshire.