Wholesale heating oil price vs retail
NYMEX $3.31. Retail $5.54. The gap is $2.23/gal. Here is where it goes.
The spread, line by line
Crude oil
$2.38 / 43%
Refining
$0.61 / 11%
Distribution and marketing
$1.00 / 18%
Dealer margin
$1.16 / 21%
Tax (state + federal)
$0.39 / 7%
Sum: $5.54 / gal. Target retail $5.54.
Numbers above sum to the retail. Crude is the volatile line. Refining margin widens in winter (crack spread). Distribution and dealer margin compress on competition, expand on cap and pre-buy programmes. State + federal tax is small but state-variable. EIA
Why retail lags wholesale by 4 weeks
Crude moves daily. NYMEX HO settles daily. Retail moves weekly because dealers post a board rate, then recalibrate against rack prices and inventory. Rule of thumb: 70% of a sustained crude move passes through to retail within four weeks. A spike that fades in two weeks barely moves the residential bill.EIA
When the spread widens
- Cold snap. Distillate draws spike, refiners switch from gasoline to distillate, but rack pricing leads. Spread widens 30 to 60 days.
- Rack shortage. Local terminal runs short. Dealers pay more, pass through fast.
- Cap programme cohort. Dealers who locked in cap programmes need higher margin on will-call business to offset.
When the spread compresses
- Crude crash. 2014 to 2015 spread compressed as dealers held inventory above market.
- Mild winter. Surplus inventory pressures dealer margin.
Cross-references
EIA SHOPP last reading: 2026-03-30NYMEX HO settled: 2026-07-13EIA next release: 2026-10-05