Saturday, October 17, 2009

What Should be Going Down Isn't

I don't pretend to understand the politics or finances of big oil.

I know only that I drive a car (so I use gas) and I have a furnace, (so I use heating oil).

But we're talking about petroleum-based products in both scenarios, right?

So why is gasoline coming down in price over the last two weeks but heating oil costs went up?

Am I being paranoid to think that the oil companies know that those of us who heat with oil must have it during the winter months?

All I really know is that at the first of October, I could get 100 gallons of oil for $229. Yet by the time I actually bought it, on October 16th, it cost me $253.

But during the same period, regular gas was decreasing in price. It went from $2.62 per gallon to $2.55.

Go figure.

1 comment:

Anonymous said...

Price is determined by supply and demand beyond the cost of the raw material (i.e. crude oil). Refineries influence price when they choose which products to process. Unleaded gasoline is processed differently than home heating oil. Demand for home heating oil increases with the onset of cold weather and the price increases. Prices may increase even more in the short term this year with the early cold temperatures in the northeast. In mild winters, prices for home heating oil often drop as manufacturers adjust the price to reflect demand. Gasoline prices drop this time of year because people drive less than the summer months.