Experts: Energy costs to decline this winter

By Johnny Jackson


Consumers can expect lower energy costs this winter, according to economists with the Energy Information Administration (EIA).

"Natural gas and propane should have some savings compared to last year," said Neil Gamson, an economist with EIA. "Even electricity expenditures should be slightly lower than last winter."

According to Gamson residents in the South can expect to spend about 6 percent less on natural gas this year, a savings of about $45 off what they paid in 2008.

He said propane prices should decrease by 12.5 percent this year, compared to last year, which would be about $200 less than what was spent in 2008. He added that electricity costs should decrease by $30, or by 3 percent, over the course of the winter heating season.

Gamson said gasoline prices have been lower this summer compared to last, but are not likely to be as low this winter, considering consistent crude oil costs driven by increasing market confidence in a potential economic recovery.

"Crude oil prices have sort of stabilized," said Gamson. "Our projection is that it will creep up a little bit over the next year."

He said consumers should expect the price of crude oil will average about $70 per barrel this winter, between October of this year and March 2010.

Average prices should rise gradually to about $75 per barrel by December 2010 as domestic and global economic conditions improve, according to the EIA's Short-term Energy and Winter Fuel Outlook, released Tuesday.

Crude oil prices averaged about $69 per barrel in September, roughly $2 per barrel below the August average, and are continuing to hover around the $70-per-barrel mark.

Gamson said consumers can expect cheaper gas prices, though average gas prices are not expected to dip as low as they were last winter.

Gas prices plummeted last fall, he said, partly on news of a lasting economic recession.

The EIA reported that national gas prices fell from an average $3.05 per gallon of regular unleaded gas in October 2008, to an average $2.15 in November 2008.

The national, average, price of regular unleaded gas was $2.46 per gallon Tuesday, down 2 cents in the past week, according to AAA's Daily Fuel Gauge Report.

The report noted that Georgia's per-gallon average was $2.27, down 2 cents over the past week. Metro Atlantans also paid 2 cents less per gallon than a week ago, at $2.26, on average, for regular unleaded gas.

AAA Auto Club South Spokesman Gregg Laskoski said the state of the economy may have some effect on crude oil prices.

He added that while crude oil traded at $69.95 per barrel on the New York Mercantile Exchange (NYMEX) on Oct. 2 - nearly $4 per barrel more than the previous week's closing price of $66.01 - oil analysts are uncertain that the increase offers a clear signal that economic recovery is taking root.

The nation's economic recession persists, according to the U.S. Bureau of Labor Statistics, which recently announced record-high job losses nationwide for the month of September (263,000 lost jobs) and a national unemployment rate of 9.8 percent.

"While the economy may make some gains in the fourth quarter, especially if we see an increase in consumer spending," Laskoski said, "it does not appear that crude prices will rise to a level that would push retail gasoline prices higher.

"For now, the oil and gasoline fundamentals and the seasonal decrease in demand favor consumers," he continued, "and that should keep gasoline prices edging lower, at least for the next few weeks."