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Residential heating, fuels for transportation costing less

 

 

By KEVIN WALKER

Michigan Correspondent

 

WASHINGTON, D.C. — The prices of residential heating oil, propane as well as diesel fuel, continue to fall, according to reports from the Energy Information Administration (EIA).

As of Jan. 14, the average retail price of propane in the United States was $2.35 per gallon, down 1.1 cents from the previous week, based on the EIA’s residential heating fuel survey.

Propane prices in the Midwest region averaged $1.92 per gallon, down three-tenths of a penny from the previous week and down 47.9 cents from a year ago.

Residential propane has gone up gradually over the years, with the fuel costing an average of 88 cents per gallon retail in the Midwest region in December 1990. By February 2012, that price was $2.22. According to the EIA, the price shot up to $3.43 per gallon in February 2014, but by December it had gone back down to $1.93 per gallon. For the EIA, the Midwest region includes Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee and Wisconsin.

In the Farm World readership area, prices of propane vary a lot. In Illinois, the price on Jan. 12 was $1.80 per gallon; in Indiana, $2.08; in Iowa, $1.55; in Kentucky, $2.14; in Michigan, $2.17; in Ohio, $2.38; and in Tennessee, $3.10.

"A record number of people called this past summer and worked out ways to buy propane," said Joe Ross, a spokesman for Michigan Propane Assoc. "It’s a little too early to see if people locked in a higher price last summer."

The average retail price of home heating oil fell 6.3 cents from a week ago to $2.91 per gallon, according to the EIA survey. That’s down $1.10 from a year ago. Heating oil prices in the New England region fell to $2.88 per gallon, down 6.8 cents from the previous week and down $1.13 from a year ago. New England has the highest usage of heating oil in the United States.

The price of diesel fuel continues to decrease as well, with the U.S. average retail price for on-highway diesel fuel falling to $3.05 per gallon as of Jan. 12, based on another weekly EIA survey. There are other grades of diesel fuel with higher levels of sulphur, which aren’t included in this survey. Diesel prices were highest in the Central Atlantic region at $3.24 per gallon, down 6.4 cents from a week ago. Prices were lowest in the Gulf Coast region at $2.96, down 8.1 cents.

For the EIA, the Central Atlantic region includes Delaware, Maryland, New Jersey, New York and Pennsylvania. The Gulf Coast includes Alabama, Arkansas, Mississippi and Texas.

Also, the U.S. price of gasoline continues to plunge, apparently in line with the ongoing drop in the price of crude oil. The average U.S. retail price of regular gasoline fell to $2.14 on Monday, Jan. 12. That was down 7.5 cents from the previous week, based on the weekly EIA price survey.

Pump prices were highest in the West Coast states at $2.49 per gallon, down 9.2 cents from a week earlier. Prices were lowest in the Gulf Coast area at $1.91 per gallon, down 8.2 cents.

In an informal survey of gasoline prices in and around Detroit last week, prices of regular gasoline ranged from a high of $1.98 per gallon to a low of $1.69. Prices also varied based on whether cash or credit was used for payment. Prices of diesel fuel were considerably higher, with prices ranging anywhere from $2.55 per gallon to $3.05.

The price of gasoline has gone down more than the price of diesel, said Michael Leahy, an economist at the EIA’s petroleum markets team. The reason is demand for gasoline goes down relative to diesel in winter, since diesel has some business and industrial uses in addition to motor fuel. Also, diesel derives its cost only 50 percent from crude oil, whereas gasoline gets 60 percent of its cost from crude oil.

"The lower cost of crude will be reflected more in gas than diesel fuel," Leahy said.

1/21/2015