Heating Oil Prices and Outlook

What are the main components of the price of heating oil?

The main cost components of the retail heating oil price for residential consumers are the

    • Cost of crude oil for refiners
    • Cost for refiners to produce heating oil
    • Costs to market, distribute, and deliver heating oil to consumers

These costs include the profits (and sometimes losses) of refiners, wholesalers, and local distributors.

From the winter of 2008–09 through the winter of 2017–18, the cost of crude oil accounted for 53% of the average price of a gallon of heating oil during the winter months (October through March). Distribution and marketing accounted for approximately 32% of the cost of a gallon of heating oil, and refinery processing costs accounted for 15% of the price.

What is the outlook for heating oil prices?

The U.S. Energy Information Administration (EIA) publishes projections for residential heating fuel prices and average household heating fuel consumption and expenditures for the winter in the October through March editions of the Short-Term Energy Outlook (STEO).

The projections for each winter are featured in the Winter Fuels Outlook section of the October edition of the STEO and in Table WF01 Average Consumer Prices and Expenditures for Heating Fuels in the October through March editions on a national and regional level. Every edition of the STEO also includes forecasts for national-level monthly and annual average retail heating oil prices in Energy Prices.

How can consumers reduce their heating oil bills?

Purchasing options

Heating oil consumers can arrange to have their heating oil tanks filled in late summer or in early fall when prices are generally lower. Heating oil dealers may offer their customers a budget plan to help even out monthly heating oil bills. Some dealers may also offer fixed-price protection programs that may help keep costs down.

Efficiency and conservation measures

Consumers can reduce heating oil consumption by caulking and weather stripping windows and doors to seal out cold air, by installing proper insulation in the attic and walls, and by reducing temperature settings on thermostats.