Thankful for Low Oil Prices
At about this time in 2011, after purchasing home heating oil for $3.50 a gallon, the second highest price paid since 2003 when I moved back to New Hampshire, I did some analysis on my blog about usage and costs. I requested a complete purchase spreadsheet from our oil company – we’ve been using the same company forever, regardless of price, because they were the only company that didn’t require having a Social Security number on file (something a retail company doesn’t need and shouldn’t be able to request for a purchase of a service).
The data really surprised me but really got me to look – and track – commodity and energy prices a bit more than I had before.
In August 2003, I paid $1.20 per gallon for home heating oil. The price steadily climbed to $3.90 a gallon in February 2008. It dropped down again to $2.40 a gallon just before the election and then rose up again to $3.50 in February 2011, when I requested the spreadsheet from my vendor. Today, I paid $1.899, about what I paid last fall when filling the tank. We use about two to 2.5 tanks a year, depending on how cold it is (one of the benefits of living in a tiny house, BTW). This year, it will be under two full tanks, I think, for the first time ever.
According to the CPI calculator, $1.20 in 2003 is worth $1.55 today, so, home heating oil prices are back to about where they should be based on normal inflation and costs. So that’s good news but not the most important news … The fact that I won’t be paying $1,300 to $2,100 this year for home heating oil but instead, paid less than $700, means that I’m now richer – we’re all richer – than previous years. Wealth has been built due to a lower cost of living in one sector of the economy. We ALL have more of our own money right now than previous years. It’s more money than I would have ever earned in interest on savings or anything else.
Citizens for Limited Taxation in Massachusetts has a motto – “Every Tax is a Pay Cut … A Tax Cut is a Pay Raise” – and the same can be said for a lower cost of living, whether it is taxes, the cost of food (which is still going up despite lower fuel costs, a rant for another day) the cost of everything. The proof is all right there, clear is day.
One last, important point that I’ve learned from tracking commodities like oil: Most of America’s home heating oil comes from Canada. In fact, Canada is the No. 1 exporter of crude oil to the United States – nearly as much as ALL of the OPEC countries combined, according to the U.S. Energy Information Administration (circa 2014). While it is always good to conserve energy, regardless of the price, know that when you buy home heating oil, you’re not supporting the terrorists and crazies overseas. As well, as America is able to mine more of our own oil, hopefully, these prices will stay right where they are … so that we’re all a little bit richer.
