Propane Prices Stabilize for the First Time in Two Months

January 22, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, January 20, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.80 per gallon, down one cent from last week. The average statewide price for kerosene is down one cent, to $4.20 per gallon. Propane prices, statewide, stabilized for the first time since the first week in October; this week’s average statewide price (for heating customers) remained the same, at $3.25 per gallon. Heating fuel prices have risen 27 cents (heating oil), 26 cents (k-1), and 60 cents (propane) per gallon since the heating season began in October. Last year at this time, heating oil averaged $3.72 per gallon; kerosene, $4.15, and propane, $2.72.

For the first time since late November, propane prices, at least for now, have stabilized. This should come as good news to Mainers heating with propane, who have had to absorb much higher heating bills in recent weeks. With the weather projected to be colder in the next couple of weeks, the Propane Gas Association of New England released a statement saying that the New England Region is “adequately supplied, and the short term outlook for continued supply is positive with waterborne imports scheduled to arrive over the next several weeks.”

This statement comes in response to an NBC News report on the state of propane in the Midwest and the Northeast. The report brought attention to the delivery challenges which exist in the two regions, and the federal response of issuing an hours-of-service wavier for 24 states in the Northeast and Midwest. This wavier allows propane haulers to exceed the driving hours limits set by the Federal Motor Carrier Safety Administration. This wavier will remain in effect until February 11th.

With the marine shipments that have already arrived, and those scheduled to arrive in subsequent weeks, the region will receive an infusion of 50-60 million gallons of additional supply. This propane is more expensive, however, so prices aren’t likely to drop over the next several weeks. Trucks available to transport this propane into Maine are in short supply; however, dealers are receiving product, and getting it out to customers. The shipments will also help combat the discrepancy between propane stocks last year and this year, as shown by the chart below.

New England Propane Stocks

Using this week’s average heating oil price ($3.80) and converting to a common heating unit value (million Btu), the price of fuel oil is $27.40. This compares with an equivalent heating unit value for natural gas of $15.50 (at $1.55/therm); propane, $35.58 (at $3.25/gallon); kerosene $31.11 (at $4.20/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, nor its efficiency. 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 January 20, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.80

3.78

3.82

3.81

3.78

3.84

High

4.06

3.98

4.06

3.96

3.90

3.97

Low

3.63

3.63

3.70

3.70

3.65

3.75

Kerosene

4.20

4.19

4.23

4.19

4.19

4.21

Propane

3.25

3.27

3.30

3.24

3.00

3.45

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 ($4.06) was found in one region in the state, and the lowest heating oil price ($3.63) was also recorded in one region. 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