Heating Fuel Prices Jump Significantly During Prolonged Period of Frigid Temperatures

January 19, 2018

Augusta, Maine - The Governor's Energy Office (GEO) conducted its weekly heating fuel price survey on Tuesday, January 16, 2018, and found the current statewide average cash price for No. 2 heating oil was $2.94 per gallon, 13% higher since the onset of frigid temperatures at the end of December, and 32% more since the heating season began in October. The average statewide kerosene price ($3.54 per gallon) shows similar price increases - 11% since late December, and 23% higher than early October. Propane prices have not risen as dramatically; propane prices (for heating customers) are up 5% since late December, and 13% since the beginning of the heating season. See table below.

Date Average Residential Fuel Price, Maine 2017-18
Heating Oil Kerosene Propane
10/2/17 $2.23 $2.87 $2.49
11/6/17 $2.31 $2.93 $2.61
12/4/17 $2.49 $3.10 $2.64
12/11/17 $2.51 $3.12 $2.66
12/18/17 $2.56 $3.16 $2.67
12/26/17 $2.60 $3.18 $2.68
1/2/18 $2.73 $3.31 $2.72
1/8/18 $2.87 $3.45 $2.77
1/16/18 $2.94 $3.54 $2.81

Compared to the same time last year, heating fuel prices are up 29%, 20%, and 13.4% higher respectively than they were at this time last year. These price increases are a few cents higher than those observed nationally, illustrated in the two tables below.

Higher global crude oil prices have been the primary reason for the increase in heating oil and k-1 prices; very high petroleum inventories globally over the past three years have placed downward pressure on crude oil prices, thus keeping heating oil and propane prices in check. These excess inventories, however, have declined significantly over the last few months; crude oil prices ($64 WTI; $69 Brent) are now the highest they�ve been since 2014 https://www.bloomberg.com/energy https://www.bloomberg.com/news/articles/2018-01-16/oil-halts-slide-from-3-year-high-as-u-s-stockpiles-seen-falling .

This global situation, combined with high demand and winter weather that impedes deliveries regionally and locally, all contribute to the significantly higher heating fuel prices Mainers have observed recently. Below is a table of prices collected for various regions of the state.

Maine Retail Heating Fuel Prices, as of January 16, 2018


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.94

2.96

2.91

2.93

2.96

2.93

High

3.19

3.19

3.10

3.05

3.19

3.10

Low

2.54

2.65

2.54

2.74

2.78

2.85

Kerosene

3.54

3.59

3.51

3.55

3.52

3.10

Propane

2.81

2.95

2.88

2.71

2.66

2.77

While prices are significantly higher, local inventories of heating fuels are still adequate to meet market demands. See graphic below.

Similar to delivered fuels, natural gas prices have also risen during the recent period of very cold temperatures. Nationally, demand for natural gas rose to a record level, largely due to the very cold temperatures and increased exports. See below.

The following table 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
Wood Pellets ($260/ton) $15.64
Natural Gas ($1.69/therm) $16.92
Heating Oil ($2.94/gallon) $21.20
Kerosene ($3.54/gallon) $26.22
Propane ($2.81/gallon) $30.77
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/

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 $3.19, and the lowest heating oil price found was $2.54. 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.

Download Release (PDF)

For Immediate Release

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