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Washington State Heating Oil Customers Get Price Relief As Economy Falters

Posted on: Thursday, 13 November 2008, 12:00 CST

For Washingtonians who use home heating oil, the struggling economy has delivered at least one bright spot: heating bills are dropping along with the temperatures.

Crude oil prices, which reached a record high of $145 a barrel in July, fell below $56 a barrel today -- a drop of more than 60% in four months.

"Worldwide and domestic oil consumption has plummeted," explained Lea Wilson, Executive Director of the Pacific Northwest Oil Heat Council. "Prices could keep dropping if a weak economy continues to dampen oil usage."

According to Jerry Hoefer, president of Seattle's Glendale Heating, the cost of heating a home with oil this winter could decrease 30% or more over last winter. "The drop in petroleum prices has lowered our average price of heating oil from $4.80/gallon in May to $3.15/gallon today," noted Hoefer.

This is welcome relief for consumers who are paying higher food costs and worrying about shrinking home values and retirement accounts.

According to Wilson, Washington State's heating oil dealers typically don't buy on futures contracts. Instead, they buy fuel on the spot market which means that they buy what they need at the rack rate. "That's good news for consumers buying heating oil now since they aren't paying the high prices charged during the summer."

Wilson has heard from heating dealers throughout Washington that fewer households are seeking to convert from heating oil. "People realize that conversion to other forms of heating is an expensive and time consuming process. The bottom line is that lower heating oil costs mean that it is financially unwise to convert to other heat sources."

In spite of lower heating oil prices, many low-income and elderly households are still having difficulties paying their heating bills. Wilson encourages them to contact the Low Income Home Energy Assistance Program (LIHEAP). To see how to qualify for LIHEAP in Washington State, visit www.liheapwa.org or call the National Energy Assistance Referral (NEAR) project toll-free at 1-866-674-6327.

The Pacific Northwest Oil Heat Council was founded in 1942 and advocates for consumers and heating oil dealers in Washington State. Visit www.pnwoilheat.com for more information.

Source: Business Wire

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