From gasoline to heating oil and propane, fuel prices in Vermont are lower than they were a year ago. The decline in prices will likely mean lower heating bills and less expensive fill-ups during the coming winter.
According to Chicago-based GasBuddy.com, a clearinghouse of real time information on gas prices across the country, on Tuesday the price for a gallon of regular unleaded varied in Vermont from a low of $3.18 in Rutland to a high of $3.69 in Derby.
Despite the range Patrick DeHaan, a petroleum analyst with GasBuddy, says prices have been falling at a surprising rate.
“It’s usual to see a decrease in the fall. It’s unusual to see a decrease of the magnitude we’re seeing today,” says DeHaan.
He says in the past week alone, gas prices have dropped an average of 6.9 cents in Vermont.
Fall prices normally drop as demand tails off and refineries shift to a winter blend of gasoline that is less expensive.
DeHaan says the severity of this year’s price decline is due to Saudi Arabia putting downward pressure on global prices and increasing U.S. oil production.
Prices are even lower in other parts of the country.
"This is a time when gas stations can really make money by slowing down how quickly they pass along those decreases." - Patrick DeHaan of GasBuddy.com
DeHaan says nationally, one-third of all gas stations are selling regular for under $3 per gallon. He says it's realistic to expect Vermont prices to drop another 10 cents in the next two weeks.
Higher prices in Vermont are partly due to regional differences that have to do with refining and shipping gasoline.
Why prices vary from one part of Vermont to the next is a subject of much debate.
There may be some differences in the cost of doing business in Burlington, say, versus Rutland, but DeHaan says some dealers may not be passing the savings along to consumers as fast as others.
“This is a time when gas stations can really make money by slowing down how quickly they pass along those decreases,” he explains.
“One station in Vermont may milk it a little bit longer than another. One competitor may have an ultra- low price and it may be incentivized to undercut its competition and the competition may be forced to lower their price as well. There are so many different factors that can influence how quickly prices drop.”
Moderating crude oil prices and increased domestic production are also bringing down the cost of fuel oil.
The Vermont Fuel Dealers Association says prices have dropped 20 percent since May. Propane prices, which spiked last year are expect to be down by 27 percent this winter.
Combined with predictions for a less severe winter, Vermonters can expect to spend less for heating.
“Will they continue their trend down? A lot depends on what happens with production here in America, a lot depends on what happens with the global economy,” says Matt Cota of the fuel dealers association.
About 50 percent of Vermont households heat with fuel oil.
The latest fuel price report by the Vermont Department of Public Service puts the average cost of a gallon of heating oil at $3.72 compared to more than $4 last winter.
Note 11:59 a.m. Oct. 15, 2014 The original headline of this post was "Heating Fuel Costs Mirror Slide In Gas Prices."
