Heating Fuel Prices Continue Their Upward Climb

December 28, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Tuesday, December 27, 2016, and found the current statewide average cash price for No. 2 heating oil was $2.22 per gallon, up another eight cents (3.7%) over the last two weeks. The average statewide kerosene and propane prices have also increased over the same time period. The average statewide kerosene price increased nine cents (3.4%) and is now at $2.75 per gallon. The average propane price is also up, but not as much as oil and K-1. The average statewide price, for heating customers, is now $2.39 per gallon, four cents (1.7%) higher than two weeks ago. Since October 3rd, heating fuel prices have increased 9-15%, depending on the fuel.

The Organization of Petroleum Exporting Countries’ (OPEC) recently announced that both member and some non-member oil producing countries would curtail oil production by up to 1.8 million barrels per day in 2017. Markets have reacted to this announcement, and global prices have risen more than 20% since late November (West Texas Intermediate, or WTI, price of $54; Brent price $56). Heating oil prices have generally followed crude oil prices, although price increases often lag behind crude oil increases. Heating oil prices have risen 4.7% over the past several weeks. However, OPEC must now deliver on promised production cuts, and the outlook for this is less certain. Both OPEC members and non-members have been raising output before the agreed-upon production curtailment starts in January http://www.reuters.com/article/us-oil-hedgefunds-kemp-idUSKBN1481VS , Historically, compliance with production cuts has been a mixed bag. So, while energy market experts predict that these price increases will be sustained throughout 2017, historical behavior may indicate another short-lived trend. The table below compares the prices between various heating fuels, and converts these prices to a common heating unit value (dollars per million Btu).

Comparison of Heating Fuel Prices per Million Btu*


Fuel Price (in dollars) Fuel Price (dollars per million Btu)
Cord Wood ($250/cord) $11.36
Natural Gas ($1.45/therm) $14.53
Wood Pellets ($261/ton) $15.82
Heating Oil ($2.21/gallon) $15.93
Kerosene ($2.75/gallon) $20.37
Propane ($2.39/gallon) $26.17
Electricity (baseboard) (15-18 cents/kwh) $43.94-$52.75

Fuel prices are only part of the calculation when determining which fuel will save you more money over the course of a heating season. The type of heating system, as well as its efficiency, is also an important factor in determining final costs. The Energy Office has a calculator on its web site that allows consumers to explore these fuel options further, as well as compare efficiencies of heating systems most closely matching their own system. 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 . Efficiency Maine also has a calculator on its website that can help consumers evaluate their heating options http://www.efficiencymaine.com/at-home/home-energy-savings-program/heating-cost-comparison/

As of December 27, 2016


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.22

2.18

2.26

2.21

2.18

2.29

High

2.51

2.30

2.51

2.34

2.40

2.41

Low

1.95

1.99

2.00

2.06

1.95

2.20

Kerosene

2.75

2.80

2.74

2.74

2.72

2.72

Propane

2.39

2.37

2.42

2.31

2.34

2.58

The price for heating oil is a statewide average; 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 found was $2.51, and the lowest heating oil price found was $1.95. Also, the statewide average price for propane is based on consumption 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