Heating-oil users to get price break
11/14/2008WASHINGTON - The dramatic drop in world oil prices means a break this winter in heating costs for the eight million households that rely on fuel oil, the government says.
In addition, gasoline prices, which have declined by nearly 50 percent since July, are expected to remain relatively low, averaging $2.37 a gallon through 2009, according to the Energy Department.
The 58 million households that heat by natural gas will pay only slightly more than last year - an estimated $889 for the October-through-March heating season, an increase of 3.6 percent, the agency said.
Although natural gas prices often mirror those for oil, some of the savings from declining wholesale gas prices will not be passed on to consumers because much of the gas they will use was bought by utilities last summer - when prices were high - and put into storage.
The department's Energy In-
formation Administration re-
vised its short-term energy outlook this week to reflect the more than 50 percent drop in crude oil prices over five months.
During the heating season, residential fuel-oil prices are expected to average $2.75 a gallon, or 56 cents a gallon less than predicted a month ago, and 17 percent lower than the price last winter.
Retail natural gas prices are expected to be $1.27 per hundred cubic feet, or 3 cents less than estimated in early October and only slightly more than last winter.
The agency report said fuel-oil users are expected to pay on average $1,694 during this winter's heating season, a 13 percent decline from last winter.
The estimate is nearly $700 less than the agency's projection of only a month ago.
Meanwhile, the agency projects gasoline prices will average $2.37 a gallon next year, compared with $2.22 a gallon last week and a national average high of $4.11 last July.
The agency projected oil prices to average $63.50 a barrel in 2009.
Actual costs of both crude and refined products, including fuel oil and gasoline, may be even lower than projected in the report. Both crude oil and natural gas have continued dramatic declines this week - declines that may not have been taken into account in the report.