Washington area consumers are getting a break on the price of heating oil -- now that the heating season is just about over.
In the past month, the retail price of heating oil here has slipped about a nickel a gallon and further decreases are expected in the weeks ahead as dealers sell the last of the heating oil they purchased last year before wholesale prices began dropping.
That means consumers who wait until spring or summer to have their heating oil tanks refilled probably will save significantly on their fuel bills. Each decrease of a penny per gallon translates to a savings of about $10 a year for an average homeowner in this area, where typical use is 1,075 gallons.
Dealers so far have passed along about half of the wholesale price cuts made by major oil companies seeking to sell the glut that has accumulated here and elsewhere in the world.
Since early February, the major companies have slashed wholesale prices for the Washington market by about 10 cents a gallon. Retail prices, however, have fallen only about 5 cents because dealers increased price margins in an attempt to recover inventory, interest and delivery costs while the weather was cold and the demand for heating oil was strong.
Analysts agree that the cold and snowy weather that worked in the consumer's favor by helping bring dramatic gasoline price cuts of up to 15 cents a gallon at some stations also worked against the consumer by propping up heating oil prices.
"If it is a cold winter, you use more heating oil and the price would be high compared to gasoline," said Tom Hogarty, an economist with the American Petroleum Institute. In addition, during cold weather, people typically stay at home and drive less, he said.
Those patterns of consumer behavior were even more pronounced this winter, Hogarty said, because of the recession, which meant people were more likely to stay home and avoid short driving trips to shopping centers as well as longer driving vacations.
Differences in the way that gasoline and heating oil are marketed also have contributed to the present wide variation -- nearly 30 cents a gallon in some cases -- in the prices of the two products, analysts said.
Regular leaded gasoline, for example, is widely available in the Washington area for $1.05 a gallon. Without the direct tax of 13 cents a gallon imposed on gasoline sold in the District of Columbia, the price is 92 cents. Heating oil, which doesn't have a direct jurisdiction tax, now sells for $1.20 a gallon. That works out to a difference of nearly 30 cents a gallon.
"What that is telling you," said economist Larry Goldstein, "is that the market is much more responsive to spot gasoline than to heating oil. It is more responsive because the consumer buying gasoline has more options. He can compare one station's prices to another by driving around . He hasn't as many options with heating oil.
"And, with heating oil, the consumer may pay a little more to be protected through the winter, so clearly there is less flexibility with heating oil. With gasoline, he may just be concerned with a fillup; with heating oil, he may want an assured supply."
Gasoline dealers can sell their product much faster than heating oil dealers. The gas station typically buys a load of new gasoline at a new price once a week, so the price he pays can be reflected almost immediately in pump prices. But the heating oil dealer begins buying and storing heating oil several months before it will be distributed to customers.
Heating oil customers in the metropolitan Washington area now use an estimated 200 million gallons of fuel each year. About 60 percent goes to homes and about 40 percent to businesses. The amount used by the average heating oil customer has been declining steadily in recent years, largely because of conservation efforts.
The average amount consumed by a homeowner in the Washington-Baltimore area dropped from 1,175 gallons during the winter of 1978 to 1,075 gallons during the winter of 1982, according to an analysis by one local company. The forecast calls for use to decline to 800 gallons by 1985.
In addition to individual cutbacks in heating oil use, an increasing number of local residents have switched to alternate heating sources, such as natural gas.
As Washington area residents buttoned down for the winter of 1979, heating oil was available for 88.9 cents a gallon through Griffith Consumers, one of the largest area distributors. That compares to Griffith's price of $1.289 a gallon in February 1982.
Because of a nickel price reduction, the Griffith price yesterday was $1.239 a gallon