Heating Oil Prices Continue to Decline, Despite Approach of the Heating Season

September 30, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, September 29, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.32 per gallon, a six cent drop over the last three weeks, and the lowest price recorded by the Energy Office since June of 2012. The average statewide price for kerosene, $3.88 per gallon, is the same as it was in mid-August. Propane prices have varied a few cents higher or lower over the last couple of months, and currently stand at $2.83 per gallon (for heating customers) One year ago, in late September, heating oil averaged $3.53 per gallon; kerosene, $3.95, and propane, $2.70.

Heating oil prices historically begin rising as heating season approaches in Maine, but not this year. Prices of both Brent crude (the world benchmark price) and West Texas Intermediate, or WTI (the North American benchmark) continue to fall; the prices of both types of oil have declined to at or very near prices not seen since June 2012 http://www.bloomberg.com/news/2014-09-30/oil-set-for-biggest-quarterly-drop-since-2012-on-supply.html . Despite the current conflict in Syria and Iraq, domestic production is up, which decreases demand for imported Brent. This has the effect of an increase in supply worldwide, which has had a dampening effect on prices.

Using this week’s average heating oil price ($3.32), and converting to a common heating unit value (million Btu), the price of fuel oil is $23.94. This compares with an equivalent heating unit value for natural gas of $14.50 (at $1.45/therm); propane, $30.99 (at $2.83/gallon); kerosene $28.74 (at $3.88/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 September 29, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.32

3.25

3.40

3.36

3.26

3.39

High

3.60

3.60

3.60

3.55

3.55

3.40

Low

3.00

3.00

3.15

3.00

3.00

3.36

Kerosene

3.88

3.92

3.88

3.90

3.84

3.79

Propane

2.83

2.88

2.93

2.71

2.93

2.66

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 ($3.60) was found in two regions in the state, and the lowest heating oil price ($3.00) was recorded 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.

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For Immediate Release

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