Falling world crude-oil prices and unseasonably warm winter weather have forced the price of home heating oil in the Washington area to its lowest level in seven years.

The average price of fuel for homeowners has dropped by 13 cents a gallon since the beginning of January to $1.04, according to a survey of 38 local dealers conducted this week. These prices don't include a 6 percent sales tax on home heating oil in the District, as well as any county taxes.

The survey also showed that prices still vary widely among dealers, and that homeowners can find oil for up to 27 cents below the area average. Some retailers said they are selling oil for less than a dollar a gallon in what officials call the softest market since before the Iranian revolution in 1979.

"I've been selling fuel oil for the last eight years, and this is the lowest I've seen it come down," said Pam Bell, vice president of Bell Oil Co. of Northern Virginia, which is selling oil for $1.10 a gallon.

"It kind of reminds me of the price increases of the 1979 era -- only in reverse," added Bill Weber, general manager of A. P. Woodson Co.

Industry officials estimate that between 20 and 25 percent of the homes in the Washington area are heated with fuel oil. The vast majority here use natural gas, whose prices also are expected to fall soon. In the District for instance, about 75,000 out of 250,000 homes use fuel oil or kerosene, while nearly 150,000 use gas, according to statistics cited by a spokeswoman for the D.C. energy office.

Fuel oil prices have been declining gradually since 1981, when they peaked nationally between about $1.25 and $1.30 a gallon, but they have taken a nose dive recently as a result of the collapsing world market for crude oil. Since December, the price of crude oil on the spot market -- for immediate delivery rather than in long-term contracts -- has fallen from nearly $30 a barrel to about $15.

This decline is one reason for the lower retail prices for fuel oil. Slightly reduced demand for fuel oil -- caused by slightly warmer than normal temperatures in this and other markets in the Northeast -- has also contributed to the fall in retail prices, analysts and industry officials said. The prices quoted by area dealers are dramatically lower than those of a year ago. The average price for home heating oil sold in the District a year ago, for instance, was $1.17, according to Energy Department statistics.

Current area retail prices are higher, though, than the price of oil in other regions of the country, officials said, citing higher transportation costs and other expenses.In Massachusetts, for instance, the average retail price this week was about 98 cents.

Despite the lower retail prices and ample opportunity to change suppliers, several company officials said that homeowners rarely shop around for lower prices and generally find it most convenient to stick with one dealer over the winter.

Industry executives also said it will be several more weeks before the decline in crude-oil prices is fully passed on to dealers. But some consumer groups say there is a relative lack of competition in the area, and that wholesalers and retailers simply have kept extra profits for themselves since crude prices started down.

But clearly the trend is to cheaper oil, and dealers said prices could fall by another dime a gallon before they stabilize.

"There is abolutely no question that you're going to see a downward pressure on home heating prices," said Leonard Steuart, president of Steuart Petroleum Co., one of the largest distributors in the area. "I don't see the prices rebounding. The fundamentals would suggest that there's more supply than demand." Steuart projected that the current soft market will extend into next winter, when he said prices should hold at between 85 and 90 cents a gallon.

One reason Steuart and other executives said the decline in retail prices lags behind the decline in wholesale prices is that large dealers can take up to 30 days to deplete their stocks of oil purchased at prices higher than the current spot price. This is less true for some of the smaller companies, which have smaller inventories.

Another reason for the difference between the declines in crude-oil and retail prices is that some dealers said they are seizing the opportunity to compensate for lower profit margins in the past.

"When the price of oil was high, we were still at $1.12," said George Brown, president of Brown Fuel Oil Co., which sells in the District. "We're trying to recoup our losses that we had by not raising our prices when everybody else did."

According to the survey, the cheapest price in this area is 77 cents a gallon offered by Buyers-Up, a cooperative of about 6,000 homes that buys oil from suppliers and then resells it to its members. Steve Holtzman, energy conservation director at the cooperative, said that the group agrees to give those retailers all their business in exchange for discount prices.

Holtzman said most suppliers have not cut prices to customers as quickly as they should, because there already has been a drop in wholesale prices of roughly 30 cents a gallon since the beginning of 1986.