NorthJersey.com

Heating Up

The Record (NorthJersey.com) — Wednesday, July 6, 2011

By KEVIN DeMARRAIS / Your Money's Worth

Homeowners who are enjoying the recent drop in gasoline prices may be in for a shock this month if they heat their homes with oil and pay for it on a budget plan: You're going to pay a lot more than you did last year.

A year ago, fuel oil companies surveyed in mid-June for The Record's Marketbasket Survey charged an average of $2.77 per gallon; this year it was $3.85, a 39 percent increase. Likewise, crude oil, which was $75 a barrel in June 2010, averaged $96 a barrel last month, up 28 percent.

So now, as we move into the hottest days of summer, consumers on budget plans are faced with paying substantially more to keep warm next winter.

Consider one reader who just got a bill from a supplier working with New Jersey Citizen Action's oil buying group. Last year: $196. This year: $256.

What makes the increase harder to take is that natural gas prices have remained low in recent years, so low that Public Service Electric and Gas Co. has cut supply rates seven times. That's a total savings of 32 percent since January 2009, when wholesale prices started to drop from record highs. Half of those cuts came last year.

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