Heating Oil Cost

How Much Does Heating Oil Cost?

January 2010 Average: $2.88-$2.98 a gallon

2005-2009 Average: $2.22-$3.85 a gallon

Also called oilheat, No. 2 heating oil or fuel oil No. 2, residential heating oil is most often used in homes on the East Coast and in the Midwest. It is used elsewhere, but not as commonly. Heating oil prices fluctuate widely over time and by location, influenced by the cost of crude oil, production expenses, transportation/distribution costs, and seasonal changes in supply and demand. The federal Energy Information Administration (EIA) provides an overview of factors affecting residential heating oil prices.

Typical costs:

Home heating oil is measured by the gallon and stored in a heating oil tank either aboveground or underground. Most aboveground tanks hold about 250 to 275 gallons, and underground tanks typically range from 500 to 1,000 gallons (for safety, tanks should never be filled to full capacity). Depending on regional climate and the severity of the winter, a 275-gallon tank might need refilling 4 to 6 times from October to March (the heating season). In milder climates a 1,000-gallon underground tank might need refilling one to three times a winter, depending on furnace efficiency and usage.
From October to March each year, the EIA posts weekly nationwide average prices for wholesale and residential heating oil. The average weekly price for January 2010 was $2.88 -$2.98 a gallon, or $635 -$660 to refill a 275-gallon tank and $1,270 -$1,490 for a 550-gallon tank. Based on EIA historical data, from 2005-2009, average prices ranged from $2.22 -$3.85. These are nationwide averages, and can vary considerably by location.
A Long Island homeowner with a 275-gallon tank reports paying more than $800 per fill-up in the 2007-08 heating season, with five to six fill-ups per winter, or as much as $4,000 -$5,000 in total costs. Some consumers reported prices as high as $4 -$4.90 a gallon in the 2008-09 season.
Location-specific pricing survey data is also posted online during the heating season for Connecticut, Michigan, Nebraska, New Jersey and New York.

What should be included:

The tank's fill pipe must be accessible and visible to the delivery company. Before winter starts and after each delivery, check that the fill cap and vent cap are in place and on tight. Alaska's Department of Environmental Conservation explains how to maintain a heating oil tank.
Companies may offer a slightly lower price per gallon for pre-scheduled or pre-paid deliveries, or volume pricing for filling larger tanks. The per-gallon price is also influenced by the payment method and contract terms.
Some contracts allow automatic delivery based on the house size, past usage and recent temperatures.

Additional costs:

Many companies offer monthly payment plans, where the estimated cost of winter heating oil is spread out over 12 months. But if the actual market rate is higher than expected, the consumer could end up with a huge bill at the end of payment plan.
Some contracts include annual cleaning and service for the home's heating system (furnace) for another $100 -$300 per winter season.

Discounts:

Have the heating oil tank filled in late summer or early fall, when prices are usually lower.
The US Department of Health & Human Services provides information about the Low Income Home Energy Assistance Program (LIHEAP), which helps low-income households meet urgent home energy needs. LIHEAP is funded by the federal government but handled by each state, so eligibility rules and assistance varies.

Shopping for heating oil:

The New York Better Business Bureau explains how to choose a fuel oil company.
Generally, heating oil dealers are local businesses. For lists of dealers, search for a local oilheat or fuel dealers council/association, like those in Massachutsetts, New Hampshire, Eastern New York, the Hudson Valley, Long Island, New York City, the Pacific Northwest, Central Pennsylvania, New Jersey or South Jersey.