Home-heating oil and gasoline are products produced from crude oil. Gasoline is used far more widely than home-heating oil, which is used mainly in the Northeastern U.S. Gasoline is subject to federal and state taxes, while heating oil is not. So, why is home-heating oil more expensive than gasoline? The answer relates to basic economic issues of supply and demand.
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3 comments:
Short answer, supply and demand. They are different commodities even though they are made from the same thing. Demand for gasoline has dropped but the demand for heating oil has not changed and if it is a cold winter, like it is, the demand goes up, of course.
Cost of supply to end user also enters into the picture.
Most gasoline customers drive to the pump; supplies there are refreshed by transport tankers.
Heating oil generally comes to the distributor by transport tankers. From there it requires a smaller truck, another driver and a variety of billing/bookkeeping expenses to get to the tank at the house. Smaller loads ordered in response to higher prices also drive the dealer's costs up.
I've cut back on temps due to prices and am enjoying my sweaters more.
Is just diesel, no?
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