Heating Fuel Prices Rise as Inventories Shrink

December 11, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, December 9, 2013, and found the current statewide average cash price for No. 2 heating oil was $3.64 per gallon, up three cents from last week, and eight cents per gallon higher than two weeks ago. The average statewide price for kerosene rose similarly, up four cents from last week to $4.04 per gallon. Average propane prices also increased significantly this week, up 8 cents, to $2.85 per gallon. This average price is higher than any time last year, but still much lower than prices during the 2011-2012 heating season.

Heating oil prices are reflective of the current crude oil price, which has risen in recent weeks. Projections of a continued decline in U.S. inventories has been the catalyst for the observed rise in price http://www.bloomberg.com/news/2013-12-10/wti-crude-rises-to-six-week-high-on-u-s-supply-forecast.html Refinery operations are at their highest level since mid- summer 2012, also a factor in declining inventories.

Propane supplies are also lower this season than last, due to lower imports to the region, and higher demand elsewhere. Propane can command a higher price outside of the U.S., so supplies flow to these higher priced areas. In addition, supplies have been very tight in the Midwest recently, due to higher demand for drying crops. Tighter supplies usually translate into higher prices.

Using this week’s average heating oil price ($3.64) and converting to a common heating unit value (million Btu), the price of fuel oil is $26.25. This compares with an equivalent heating unit value for natural gas of $15.50 (at $1.55/therm); propane, $30.33 (at $2.85/gallon); wood pellets, $14.67 (at $242/ton); cord wood, $11.36 (at $250/cord) and electricity, $43.96 (at 15 cents per kwh). These fuel-only prices do not take into account the type of heating system. For example, the electricity cost is for traditional baseboard heat. Other electric heating technologies, such as heat pumps and electric thermal storage (ETS), may offer consumers energy savings. Cold climate heat pumps, a recent technological advancement, are much more efficient than baseboard electric heat, so total energy costs are lower than many other types of heating fuels. ETS offers savings by utilizing off-peak electric rates, available in many areas of the state.

The Energy Office has a calculator on its web site that allows consumers to obtain more detailed estimates of home heating costs, and the price impacts of various types of fuel, heating systems and heating appliances. Heating costs vary considerably from home to home. The home heating calculator can assist homeowners in finding the best heating option for their home, location, lifestyle, and budget http://www.maine.gov/energy/index.html

As of December 9, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.64

3.61

3.66

3.67

3.58

3.72

High

3.95

3.90

3.95

3.90

3.75

3.75

Low

3.45

3.45

3.50

3.45

3.45

3.70

Kerosene

4.04

4.01

4.07

4.07

3.97

4.12

Propane

2.85

2.91

2.93

2.78

2.77

2.85

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 highest heating oil price ($3.95) was found in one region in the state, and the lowest heating oil price ($3.45) was found in three 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 generally pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

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