The price of heating fuels has dropped dramatically compared to last year, but consumers might not see the benefit right away. Iowa Department of Natural Resources energy analyst, Tommi Makila, says the economy has helped pushed prices lower.
He says all the major heating fuels, especially natural gas and propane have gone down dramatically. Makila says the natural gas price has collapsed, as a lot of industries use natural gas, but with the downturn in the economy, the demand has dropped and supplies are up. Natural gas was trading at three-dollars and 80 cents a B-T-U, on Monday, down by five dollars and 42 cents compared to last year.
Makila says utilities lock in some natural gas supplies before winter to try and get lower prices, so consumers don’t automatically see a drop in price. Makila says that did have an effect on the price consumers pay, as utilities start buying gas late in the spring for the next winter.
So some of the natural gas used this winter could have been more expensive than the current prices. He says everyone could benefit next winter if the utilities are able to buy up some gas now with the prices down. Makila says it looks likely those prices will stay low, which he says will be a good thing come next winter. Natural gas is the most heavily used fuel with 67% of Iowans using it to keep warm. Those who use heating oil will save by filling up their tanks now as it is selling for around one dollar and 60-cents a gallon, down almost two dollars from last year.
The average retail price of propane in the recent D.N.R. survey was $1.62 — 49 cents lower than at this time last year.