High gas prices and overall inflation have greatly affected U.S. homeowners as of late. Those who heat their home with oil have felt the pain even more so, as oil prices remain volatile and continue to rise. One question we often get is "Gas prices have been going down; why aren't oil prices decreasing too?" Although both home heating oil and gasoline are derived from crude oil, they are two different products. Unfortunately, that means that you can't always compare the prices at the pump to the costs to heat your home.
So, why is the current average gas price in Pennsylvania at $3.882/gallon, while the price for heating oil is around $5.419/gallon? There are two main reasons: they have different distribution systems and they have different supply and demand.
According to the Office of Legislative Research, crude oil is distilled to make many different products, including gasoline and heating oil. There are different refinement and delivery processes for each product, meaning natural disasters or international events may affect one product's price but not the other.
Moreover, consumers use gasoline for their cars throughout the year, while heating oil is mainly used during the winter months. Seasonal demand means prices will increase during peak times of year, like the start of fall and middle of winter. Regionality also plays a role in supply and demand; heating oil is used predominately in the Northeast while gasoline is used nationwide. Thus, a seasonal and regional product's price may be higher than a year-round and national product due to supply and demand.
If you live in or around Bucks County and need an oil delivery, visit our discounted oil website.
