Prices of Heating Oil Continue On Downward Trajectory

June 11, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, June 10, 2013, and found the current statewide average cash price for No. 2 heating oil to be $3.38 per gallon, five cents lower than the Energy Office reported three weeks ago. Kerosene prices declined also, dropping four cents over the last few weeks to a statewide average of $3.83 per gallon. Propane prices also came down; this week’s average price statewide is $2.61 a gallon, a ten cent drop in the last two weeks. This week’s again lowered prices for both No.2 heating oil and kerosene marks a nearly 50 cent decline since record highs in February. Propane, which has fluctuated less in price over the same time period, has dropped an average of 15 cents since winter.

A dispute between Sudan and South Sudan this week has led Sudanese President Umar al-Bashir to threaten to block South Sudan’s oil exports http://www.bloomberg.com/news/2013-06-09/sudan-threatens-to-shut-down-south-sudan-oil-over-rebel-support.html . When the South seceded in 2011, it took with it three quarters of the formerly united country’s output of crude oil, totaling roughly 490,000 barrels per day. However, in the event of a shutdown of South Sudan’s exportation, the impact on the supply of oil in the United States would be minimal, as the chief importers of South Sudan’s production are in China, Malaysia, and India. The US mainly imports oil from Canada, Venezuela, and a smaller amount from countries in the Organization of Oil Exporting Countries (OPEC), which includes Saudi Arabia.

A more probable reason for the downward price trends are declines in Chinese industrial production, which, as the world’s second largest oil consumer, would have a downward effect on prices. http://www.bloomberg.com/news/2013-06-10/crude-declines-from-two-week-high-on-china-data.html

Using this week’s average heating oil price ($3.38) and converting to a common heating unit value (million Btu), the price of fuel oil is $24.37. This compares with an equivalent heating unit value for natural gas of $17.00 (at $1.70/therm); propane, $28.58 (at $2.61/gallon); wood pellets, $14.55 (at $240/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. Heat pumps, a recent technological advancement, are much more efficient, so total energy costs are lower than oil, kerosene, or propane.

As of June 10, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.38

3.27

3.48

3.38

3.40

3.49

High

4.00

3.40

3.60

3.55

4.00

3.55

Low

3.10

3.10

3.30

3.10

3.10

3.40

Kerosene

3.83

3.77

3.93

3.81

3.79

3.89

Propane

2.61

2.54

2.68

2.58

2.70

2.57

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. This week, within the Energy Office sample, the lowest heating oil price of $3.10 was found in three regions of the state, and the highest of $4.00 was found in one region in the state. 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 generally pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

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 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