Heating Oil Prices Fall For Third Straight Week

March 12, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, March 11, 2013, and found the current statewide average cash price for No. 2 heating oil to be $3.73 per gallon, down another five cents from last week’s price survey, and 13 cents lower than this time last year. The average kerosene price also fell six cents, to $4.19 per gallon. Propane prices, however, did not decline like heating oil and kerosene. The statewide price for propane gained one cent after a 6 cent drop last week, averaging $2.77 per gallon.

For the second week in a row, the decline in heating oil and kerosene prices can be attributed to the Chinese economy growing more slowly than predicted. Reduced demand there, coupled with reports of a production increase in Saudi Arabia, had a downward effect on crude oil prices http://www.bloomberg.com/news/print/2013-03-11/oil-falls-a-second-day-as-china-industrial-growth-slows.html

Figure 1 below illustrates just how much Maine’s heating oil costs are determined by global demand.

Annual US liquid fuels consumption

According to the Energy Information Administration (EIA), for six of the last seven years, the United States consumption of liquid fuels has declined. Higher prices, less than favorable economic conditions, changing consumer preferences, and more efficient vehicles all contributed to the decrease in consumption. Higher prices have caused consumers to find ways to use oil more efficiently, as well as switch to more economical fuels, a trend we have also seen here in Maine. However, production in the US has not decreased significantly. Strong global demand has allowed refiners to export products; in 2011, the US became a net exporter of liquid fuels http://www.eia.gov/oog/info/twip/twip.asp . Using this week’s average heating oil price ($3.73) and converting to a common heating unit value (million Btu), the price of fuel oil is $26.89. This compares with an equivalent heating unit value for natural gas of $17.00 (at $1.70/therm); propane, $30.33 (at $2.77/gallon); wood pellets, $14.79 (at $244/ton); cord wood, $10.50 (at $210/cord) and electricity, $43.96 (at 15 cents per kwh). The electricity cost is for traditional baseboard heat. Electric heat pumps, a recent technological advancement, are much more efficient, so total energy costs are lower than oil, kerosene, or propane.

The GEO has a calculator on its web site that allows consumers to estimate home heating costs and price impacts of various energy sources. See http://www.maine.gov/energy/index.html . Efficiency Maine Trust also has an interesting chart homeowners can use to compare costs of specific heating options http://www.efficiencymaine.com/pace/compare-heating-options .

As of March 11, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.73

3.66

3.81

3.75

3.67

3.86

High

3.90

3.90

3.90

3.90

3.80

3.90

Low

3.40

3.40

3.60

3.40

3.40

3.85

Kerosene

4.19

4.14

4.28

4.18

4.12

4.26

  Propane

2.77

 

 

 

 

 

It is important to note that the price for heating oil is a statewide average, and that prices in a given geographic region of the state may be considerably higher or lower than this average. Within the Energy Office sample, the lowest actual heating oil price of $3.40 per gallon was recorded in three regions of the state. Likewise, the highest price of $3.90 per gallon was reported in four regions. Also, the statewide average price for propane is based on a use of at least 900 gallons a year. Households using propane just for cooking or hot water may pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

Efficiency Maine links Maine homeowners and businesses with qualified, certified contractors who provide access to energy improvement options. For program details call 866-376-2463 or visit www.efficiencymaine.com.

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For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov