Heating costs are up -- or down -- depending on fuel
If you're like many people, you probably hardly notice when your furnace clicks on and off. But when the oil bill arrives - that's another matter. And if you use natural gas, the heating-bill shock may be even greater.Skip to next paragraph
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Heating oil prices are generally down nationwide. And they may continue to drop if winter weather in what are normally the coldest parts of the country continues to be comparatively mild, slowing demand for the fuel.
Homeowners using natural gas, by contrast, face the possibility of steep price increases over the next three months. According to an Energy Department forecast, natural gas prices may rise as much as 25 percent during the first quarter of 1983 compared to the same period last year.
Some cities, such as Buffalo, New York, have already experienced natural gas price jumps of up to 40 percent. Increases of this magnitude, expecially in areas hard-hit by unemployment, promise to make gas prices a burning political issue. Citizen and consumer groups are urging homeowners to call or write legislators in an effort to defeat proposals for continued decontrol of gas prices.
For oil, the outlook is quite different. In this suburban Connecticut town, the Home Oil Company, a local heating oil distributer, is charging around $1.25 a gallon, down from $1.31 at the same time last year. According to the Bureau of Labor Statistics (BLS), which tracks oil prices on a monthly basis, this drop in price locally reflects a national trend downward.
BLS figures show that the average retail price of heating oil nationally declined to about $1.23 last month.
''Prices have gone down across the board in the last year,'' notes David Morehead, an analyst for the National Oil Jobbers Council in Washington, D.C. NOJC represents more than 6,000 retail heating oil distributors. ''The biggest problem for our dealers so far has been the very, very low demand.''
Price forecasts now vary, however.
''Some of the expert opinion we've been getting says the price is going to stay pretty constant,'' says Dorothy Rhodes, a spokeswoman for the Independent Connecticut Petroleum Association, an oil dealer organization.
Jan Lundberg of the Lundberg Letter, an oil industry publication, says the wholesale price of home heating oil over the past few days has been ''falling fast.'' These decreases, he says, may eventually surface to some degree on future heating bills.
Experts partially attribute the prospects for continuing decline in wholesale prices to OPEC's failure to reach agreement on crude oil production quotas. Even before the recent unsuccessful OPEC meeting in Geneva, excess supplies had been forcing lower prices.
Regarding natural gas, the Energy Department forecasts the average price could reach $6.60 per thousand cubic feet - the common way of quoting prices - by the end of the year. This would be an increase of 150 percent over the average retail price five years ago.
While gas industry spokesmen claim that natural gas is still, by and large, a less expensive source of energy for the home, some consumer groups warn that gas is losing its competitive edge.
In fact, some experts say the Energy Department figures may be too conservative. The Energy Action Project of the Citizen-Labor Energy Coalition finds that homeowners in some parts of the nation, such as southern California, may see a 70 percent increase in gas prices just this winter.
The coalition has reportedly hired canvassers in more than 20 states to contact homeowners, explain the pricing issue, and encourage opposition to further increases.
Projected increases are largely attributed to the possibility of continued deregulation of natural gas and to gas pipeline ''contract clauses,'' under which companies prepay for gas that they then have to store because demand has dissolved. Prospects for the Reagan administration's program of further deregulation have dimmed, however. Administration officials concede that the chances of such legislation passing this year are slight.
In fact, there is a potpourri of proposals to keep the lid on prices, both over the short and long term. Sen. Thomas F. Eagleton (D) of Missouri is pressing for a freeze on natural gas prices. Most observers say this proposal has little chance of succeeding.
Producers have said that accelerated decontrol will ensure continued abundant supplies and, in the long run, have at least a moderating effect on prices. However, some in the gas industry have expressed concern that the higher retail prices that would come with deregulation may simply turn customers to less expensive alternatives.