Heating Oil Prices Drop Below £400
The average cost of 500 litres of home heating oil has fallen below £400 for the first time since the onset of the Iran crisis in February, according to data from the NI Consumer Council.
The council reported that the average price on Tuesday stood at £395, a significant decrease from the peak of nearly £630 recorded in April.
Global Oil Market Trends
Oil prices on international markets have been declining in recent weeks as anticipation grew over a potential agreement between the US and Iran. Prices have continued to decrease following the announcement of the deal.
On Tuesday morning, Brent crude was priced just above $80 per barrel, compared to approximately $120 per barrel during the height of the crisis. Prior to the conflict, prices had been as low as $65 per barrel, reflecting an oversupply in oil production.
Impact on Heating Oil and Household Usage
This trend was also reflected in heating oil prices, with 500 litres costing less than £300 at the beginning of this year. Approximately two-thirds of households in Northern Ireland rely on home heating oil.
Unlike regulated markets such as gas or electricity, the heating oil market operates without regulation, which led to prices nearly doubling within a week at the start of the crisis.
To assist lower-income households that use heating oil, a £100 grant is scheduled to be provided later this year.
Petrol and Diesel Price Trends
Figures from the Consumer Council also indicate that petrol and diesel prices have been decreasing from their recent highs.
Last week, the average price for a litre of unleaded petrol was just under 151p, down from a peak of 154p. Diesel prices have experienced more significant fluctuations, with last week's average at 169p per litre compared to the April peak of 188p.
Crude oil is a fundamental component in the production of petrol and diesel, meaning that increases in wholesale oil costs directly affect fuel prices at the pump.
Analysts say every $10 (£7.53) increase in the oil price pushes up pump prices by roughly 7p a litre.
