Analysis: Northern Ireland home heating oil prices see yet another rise - but is this a good time to buy, compared to recent prices?

Home heating oil prices have increased yet further, for the second time this month, data from the Northern Ireland Consumer Council shows.

The latest figures show that the average price of a 900 litre oil delivery in Northern Ireland now stands at £799, up from £763 a week earlier, and up by almost £50 on the figure for the week that ended on Friday January 13. A smaller delivery of 500 litres is up over that time from £426 to £454.

These rises are the second rises since the middle of December after a period in which they fell.

But prices have been see-sawing since the summer. So is this a good time, based on recent form?

The answer is yes – it is still a better-than-recent-average time to buy oil.

Let's look at the recent trends to understand why.

For more than three months prices have been consistently lower than their most recent peak of £923 for 900L on October 13 (£524 for 500L), after which they fell over a seven-week period to £744 for 900L at the beginning of December (£419 for 500L).

Then they spiked up over the next three weeks, reaching £878 just before Christmas, on December 22 (£501 for 500L). If you bought just before Christmas (as this author did on Dec 23, to make sure the tank did not run dry over the festive period) you got a raw deal.

Prices then headed down again for three weeks, bottoming out at £752 in the recent low of January 12 (£427 for 500L).

What does all this mean?

If recent form is to be summarised back to the summer, the range in prices is from a low in the middle of August (of £728 for 900L/ £413 for 500L) to a high in mid September (of £929 for 900L/ £528 for 500L).

For larger 900 litre purchases, this means:

• you are doing well if you buy it for a pounds number that is seven hundred something.

• you are doing OK if it costs eight hundred something.

• and you are paying top notch if it costs nine hundred something.

For a smaller purchase of 500 litres, the current average Northern Ireland price is £454. The range since August is £412 to £527.

So if you are buying that amount, then:

• you are doing well if you pay under £450

• you are doing OK if you pay under £500

• you are paying top whack over £500

Generally, it makes sense to buy the largest amount you can because for smaller purchases you get less litres per pound paid.

However, this logic is turned on its head at a time of high prices. You are taking a risk by making a bigger purchase in such periods.

Thus in my pre Christmas purchase I bought a small amount to tide me over. But it is running low and I have been holding out again as prices rise.

It becomes like deciding when to buy or sell shares. And as the experts always remind people, past stock market performance is no guide to future share prices.

It is still, just about, a good time to buy oil compared to the last six months.

I reach that conclusion despite a call to my own supplier this morning, to check, which suggested that figures have edged up even since the NI consumer data, which was released on Thursday.

But whatever you do might lead to regrets. If you buy now and prices track down, you will regret it. If you delay and they track up you will regret that too.

There are so many imponderables that it is hard to predict what will happen (scroll down for an article on how petrol and diesel prices, having fallen recently, might begin to rise again).

Will, for example, the current £600 energy support payments to households across Northern Ireland lead to a local increase in the number of homes making oil purchases, so pushing prices up?

Some pundits say recovering demand in China will push up oil barrel prices worldwide.

Others say home heating oil prices in the UK might fall back in the spring as demand eases.

The only thing that can be said with confidence is that if you buy now you are by no means buying at one of the worse times compared to averages since the summer. But that could change within a fortnight …

So what am I planning to do? It looks like a bigger purchase than I got at Christmas, but not a full tank – in that no doubt forlorn hope of a fall in the spring.

Ben Lowry (@BenLowry2) is News Letter editor

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