Home heating oil prices not dropping yet - WBTV 3 News, Weather, Sports, and Traffic for Charlotte, NC

Home heating oil prices not dropping yet

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HICKORY, NC  (WBTV) –  As prices continue to drop at gasoline stations across the Carolinas, not every fuel price is easing up.

Home heating oil has been stuck at $3.68 a gallon since June, despite the almost daily fluctuation in crude oil prices and what consumers are paying at the pump for gasoline and diesel fuel.

"Cold weather is coming and people need to think about filling up," said Sam Ball of Bumgarner Oil Company on Tuesday. 

Many users of home heating oil have delayed filling up because of the cost, hoping the price would come down but so far it hasn't.

"We don't know what is going to happen with the price," said Ball.

Normally, prices would start to rise as the cold weather months approach but over the past couple of years, the price has actually dropped in the fall. Experts are split on whether that will happen again this year.

Heating oil is actually diesel fuel without the 60 cents of highway tax. A red dye is mixed in so people driving on the highways can't escape getting caught using the non-tax paid fuel. Still, many consumers are wondering why fuel oil is stuck at $3.68 a gallon when diesel is selling for just a dime more at the service stations.

"The oil companies are just thinking money, money, money, money," said Luther Harris at a service station in Granite Falls.

Without the highway tax, diesel fuel could be considered home heating oil and theoretically could sell in the range of $3.15 a gallon.

Local oil companies though say that's not exactly true.

Ball said distributors don't have much leeway in setting prices for consumers. The bigger companies at the tank farms that sell fuel to distributors set the basic price. There is a small margin of profit built in, said Ball and consumers of heating oil need to understand that the profit in those sales is not supported by sales of other items that convenience stores have.

"In those places, the fuels are sometimes loss-leaders where profits come from selling store items, not gasoline."  Home heating oil costs also include delivery fees and sales taxes.

As the debate over prices continues, experts say there are only two sure things in the energy situation these days: people will still need gasoline to drive places, and cold weather is not too far away.

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