In 1999, crude oil accounted for approximately 48 percent of the cost of a gallon of heating oil. Heating oil prices paid by consumers can vary over time and by where a consumer lives. Prices can change for a variety of reasons. A homeowner in the Northeast might use 650-1,000 gallons of heating oil during a typical winter, while consuming very little during the rest of the year. Crude oil prices are determined by worldwide supply and demand.
Demand can vary worldwide with the economy and with weather.
Heating Oil Prices Follow Crude Oil Competition in local markets - Competitive differences can be substantial between a locality with only one or a few suppliers or dealers versus an area with a large number of competitors. Consumers in remote or rural locations may face higher prices because there are fewer competitors. Regional operating costs - Prices also are impacted by higher costs of transporting the product to remote locations. In addition, the cost of doing business by dealers can vary substantially depending on the area of the country in which the dealer is located. Heating Oil is Important to Consumers in the Northeast Of the 7.7 million households in the United States that use heating oil to heat their homes, 5.3 million households or roughly 69 percent reside in the Northeast region of the country.