Heating Fuel Prices Inching Upward

July 24, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, July 22, 2013, and found the current statewide average cash price for No. 2 heating oil to be $3.42 per gallon, an increase of three cents over last week and six cents higher than two weeks ago. Kerosene prices have seen an increase as well, up three cents from two weeks ago to a statewide average of $3.84 per gallon. Propane prices actually came down in the same two week period: after a four cent increase from July 8th to July 15th, the statewide average has dropped eight cents in the past week to $2.63 per gallon.

The elevated prices in heating oil can be attributed to a handful of factors that have narrowed the price gap between international benchmark Brent crude and North American benchmark West Texas Intermediate (WTI). Increased production and refining in North America have offset the volume of imported Brent crude, depressing its price while strengthening that of WTI. The U.S. Energy Information Administration projects that the price spread between the two benchmarks will widen again as Alberta, Canada’s oil producing region recovers from flooding this spring and production in the mid-west U.S. of continues its growth (www.eia.gov/forecasts/steo/report/global_oil.cfm). The reduction in propane prices however is likely tied to the increase in domestic inventories, which are up 0.6 million barrels from the week of July 8th (www.eia.gov/oog/info/twip/twip.asp).

Using this week’s average heating oil price ($3.42) and converting to a common heating unit value (million Btu), the price of fuel oil is $24.26. This compares with an equivalent heating unit value for natural gas of $17.00 (at $1.70/therm); propane, $28.82 (at $2.63/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 July 22, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.42

3.32

3.50

3.44

3.38

3.51

High

3.70

3.40

3.70

3.62

3.60

3.55

Low

3.18

3.18

3.40

3.18

3.18

3.43

Kerosene

3.84

3.78

3.89

3.85

3.83

3.91

Propane

2.63

2.54

2.76

2.51

2.66

2.82

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 $3.18 was found in three regions of the state, and the highest of $3.70 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 Trust 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