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Friday, January 02, 2009 10:35 AM Expect to pay less for fuel in 2009 By Rochelle Moore | Times Staff Writer The best economic news in the New Year is consumers can expect to continue paying less for fuel. The price of gasoline and costs for propane, heating oil and natural gas are expected to remain lower in 2009 than 2008 levels, according to estimates by the Energy Information Administration. People using propane gas for home heating will be paying close to 14 percent less this winter due to declining fuel prices. The current economic slowdown is expected to lead to further reductions of global energy demand and declines in crude oil and other energy prices, the EIA reports. "Compared to last year, it's certainly down," said Michael Barnes of Brown Oil-Wilson Petroleum Co. of the upcoming winter costs for propane and heating oil. By the end of last winter, the cost of propane was $2.69 per gallon. The current price is about $2 per gallon, said Roland Lucas, office manager for Deans Oil and Gas Co. Heating oil is also close to $2 per gallon. "It's a very unsettling market right now," Lucas said. "We get price changes every day." The highest cost for propane in 2008 was during the summer months when it soared to $2.89 per gallon. "It's dropped 90 cents," Lucas said. "It's good for the consumer. Milder winters are also good for the consumer." The EIA predicts heating oil prices will drop 24 percent from the 2007-08 heating season to an average of $2.53 per gallon. Residential propane prices are predicted to average near $2.10 per gallon, a decrease of 14 percent from last winter. Propane is a popular heating fuel used by residential, business and farming customers, Lucas said. Natural gas prices, which have declined from a monthly average of $13.06 per thousand cubic feet in June, are expected to average near $6.25 Mcf in 2009. "A year ago, natural gas was trading at $7 per (Mcf)," said Kevin O'Donnell with Nova Energy Consultants in Cary. "It then went straight up with oil to over $13 per (Mcf) this past summer. Again, just like oil, natural gas has now fallen like a rock to be right at $6 per (Mcf)." Crude oil, which drives the price of other fuels, is expected to average at about $51 per barrel in 2009. The annual average retail gasoline and diesel fuel prices in 2009 are projected to be $2.03 and $2.47 per gallon, respectively, the EIA reports. The cost of electricity, which has increased about 18 percent in Wilson since July, will remain higher in 2009. Wilson Energy customers will face a 4 percent rate increase in February. Nationally, electricity costs should rise by 6 percent, to a national average of 11 cents per kilowatt hour. Wilson Energy customers pay a 13.3 cents per kwh rate in the winter and 14.6 cents per kwh in the summer. Natural gas prices for Wilson energy customers were also set to decrease 11 percent starting Jan. 1 from $2.03 to $1.81 per 100 cubic feet (ccf) for the first 500 cubic feet. The rate will also decrease from $1.94 per ccf to $1.72 per ccf for usage over 500 cubic feet. "The bad news is that we're in a recession," O'Donnell said. "The silver lining is that energy prices are way down because demand is down. Everything is tied to oil so all these other prices are plummeting because oil is plummeting." rochelle@wilsontimes.com | 265-7818 |
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