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Written by Brian Murphy, Visiting Research Fellow
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Monday, 14 September 2009 00:00 |
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As summer winds down, around eight million American households will turn to heating oil to stay warm this winter. The price to fill their first tank is much lower than it was last year.
Source: Energy Information Administration. Click to enlarge chart.
The price for a gallon of heating oil hit a record high of $4.65 in July 2008. That represented the culmination of an 81 percent ($2.09) run-up in prices since July 2007. Many consumers, anticipating even higher prices during the winter months, entered locked-in price contracts with their suppliers. Their bets did not pay off. The actual average price from October to April (the federal definition of the heating season) was $2.69 per gallon.
This time around, the starting point looks much different. As of the end of July, the average price stood at $2.45 a gallon, unchanged from June – and a 47 percent ($2.20) decline from a year earlier. Early August data show this price level holding.
Not only has the price given back all its 2007-2008 gains, consumers comparing previous years would need to go back to July 2005 in order to find an inflation-adjusted price this low.
Nominal and real home heating oil prices (starting in 1978) are shown in the AIER Chart Book, available from the AIER Bookstore for $10.
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The per-gallon price increased $2.09 between July 2007 and July 2008. This increase is the 81% mentioned.
I think you read it as the price increasing from $2.09 to $4.65.
Best,
Brian Shea Murphy
And this is a eco write up?