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Home fuel prices on rise

September 07, 2000

Home fuel prices on rise



By ANDREW SCHOTZ / Staff Writer


Home heating oil prices will increase by about 30 percent this winter, according to federal energy projections released Wednesday.

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Oil will likely cost, on average, $1.31 per gallon, or about 30 cents more than during the same period last year, according to the Energy Information Administration.

Consumers also can expect to pay 25 percent to 30 percent more for natural gas.

"Higher crude oil prices push the prices of all (petroleum) products up," said Jonathan Cogan, an energy information specialist with the Energy Information Administration.

Two Tri-State area oil suppliers contacted this week have prices a shade below the national projection.

Solliday Oil Co., which serves Washington County, was charging $1.29 a gallon for heating oil.

Phil Adams, the president of Steffey and Findlay, said his company was charging $1.299 a gallon, up 38 cents from this time last year.

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"It's anybody's guess" what the price will be next year, he said.

Other companies wouldn't say what their prices are or will be.

At Oliver Oil Co., which serves Franklin and Fulton counties in Pennsylvania, heating oil prices are about 40 percent higher than in 1999, said Vice President of Operations John Strickler. He declined to give the prices.

"The main reason for this whole recent spike is the lack of inventories," Strickler said.

Tim Carbone, the manager at Southern States Spring Mills Petroleum Services in the Falling Waters, W.Va., area, said there should be enough supply, in general, for prices to dip. "I feel like we're on some sort of an artificial high," he said.

Carbone also declined to give the prices at his company, which serves the Eastern Panhandle and Washington County.

The supply of natural gas is lagging behind demand, and there is about 18 percent less in storage than last year, the Energy Information Administration estimated.

"Low prices over the last several years led to disincentives," Cogan said. "Production has been flat."

Price surges are helping, but "that won't show up as new production for six to 12 months," he said.

Cogan said that increased gas-generated electricity production has helped drive up the demand.

Rates are frozen at Allegheny Power, spokesman Guy Fletcher said. The average monthly residential bill in Maryland is $64.04, based on the use of 1,000 kilowatts, he said.

U.S. Secretary of Energy Bill Richardson said Monday that 2 million gallons of heating oil will be in reserve in the Northeast this year. A Department of Energy spokesperson said the oil is "only a buffer" to protect against shortages.

President Clinton ordered that the reserve be set up. There are no parameters for its use yet, Cogan said.

In January, the price of kerosene rose at local retail stores from just under $1 to, in some cases, almost $1.70.

The price has dropped since then.

Solliday Oil Co. was charging $1.37 a gallon on Thursday, General Manager Gary Grove said.

On Dual Highway, kerosene was selling for $1.199 at Sheetz and $1.299 at Exxon.

It is too soon to gauge the severity of the coming winter, according to Jim Wiesmueller, a forecaster for the National Weather Service in Sterling, Va.

So far, weather has been cool, but not cold, because a large-scale trough is pushing a jet stream to the south, Wiesmueller said. He said it is uncertain how long that condition will last.

This area had a cold winter in 1996, but the past three have been mild, he said.

"A break in the current general strength of fuel prices could come if winter weather is mild," the Energy Information Administration stated. "However, assuming normal winter temperatures, the combination of higher expected consumption and higher prices would be expected to yield average increases in heating fuel expenditures of 20 to 40 percent this heating season, depending on the heating fuel used."

Carbone said a powerful snow storm could incite a mad rush for heating oil, regardless of the prices.

Crude oil prices continue to be about $29 a barrel, their highest level in a decade.

In June, the Organization of Petroleum Exporting Countries agreed to increase production after July 1.

The Energy Information Administration said it is likely that OPEC members will boost production further when they meet again Sunday.

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