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Plan Fuel Purchases to Catch Lower Prices

Gasoline, diesel and natural gas trend lower, but not heating oil and propane.

Here's a quick look at fuel cost projections for the next few months. It comes from U.S. Department of Energy's Energy Information Administration's August outlook.

The prices are national retail averages, not bulk rate values. Your area may run higher or lower. From these trends, you may pull clues as to when to buy for future needs.

Gasoline: Retail pump prices are expected to continue their decline into January 2008, bottoming at $2.63 a gallon, then turning higher again. Wholesale gas prices follow a similar trend. EIA projects 2008 retail gasoline to average $2.81, up a nickel from 2007.

No. 2 diesel fuel: Look for the national on-highway diesel average to hover around $2.96 a gallon through February, then top out at $3.03 in May. Current projections suggest a $2.99 U.S. average for 2008, up 17 cents from 2007.

Heating oil: Fuel oil for residential heating is projected to steadily rise from September's $2.60 a gallon national average, topping at $2.74 in February. Look for 2008 heating oil costs to average close to $2.68, up 18 cents from 2007.

Natural gas: Assuming near-normal weather into fourth-quarter 2007, residential gas rates are expected to trend downward from August's $15.16 per thousand cubic feet as a national average, falling to $13.14 in December, then bouncing back up to $13.58 by February. Then expect prices to drop below $13 by April.

The 2008 national average price currently is pegged at $13.64. Spot natural gas prices run significantly lower, as do commercial and industrial rates. But they follow a pattern similar to residential rates. Prices tend to be highest in New England and lowest in the Northern Plains states.

Propane: Residential rates, not including taxes, are projected to steadily rise from August's $1.97, peaking at $2.17 in January. Then expect prices to slowly deflate to $1.90 by August. Again, that's a national average.

Historically, propane prices run highest in the Northeast and lowest in the Midwest, with a spread of 52 to 64 cents a gallon.

Get the latest EIA update on the Web at:

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