Winter Heating Costs Should Be Lower This Year Mild Conditions Nationally Last Winter Prevented Drawdown Of Fuel Supplies

The warmer temperatures that blanketed much of the United States last winter will be felt in the form of lower heating costs this winter.

The Energy Department’s Energy Information Administration said Wednesday that the relatively mild winter of 1996-97 left supplies of heating oil, propane and natural gas at a higher level than last year.

As a result, homeowners can expect smaller heating bills this winter.

The average homeowner using heating oil should save between $60 and $70 this winter, compared to last year. Natural gas bills are expected to drop about $20. And customers who heat their homes with propane can look for savings of more than $90.

“It appears that the nation is in pretty good shape,” said Jay Hakes, the agency’s administrator. “It’s a different picture than we were seeing at this time last year.”

Last year, the unusually cold winter of 1995-96 had diminished fuel supplies, and prices of heating oil and natural gas surged as utility companies scrambled to replenish their reserves. The cold temperatures during the fall and early winter exacerbated the situation, as utilities tried to keep up with demand. Customers howled and governments investigated the sharp price increases.

But once temperatures turned warmer, prices dropped and utilities wound up with higher reserves than expected.

The drop in fuel prices is expected to spread to gasoline. With more motorists driving longer distances and burning more gasoline, pump prices topped $1.30 a gallon last summer.

Because driving declines in the winter, the demand for gasoline falls as well, and gas prices are expected to drop by 5 to 7 cents a gallon.