Heating Fuel Prices Decline from Heating Season Highs, but Remain Well Above Last Year’s Low Prices

August 2, 2018

Augusta, Maine - The Governor's Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, July 30, 2018, and found the current statewide average cash price for No. 2 heating oil was $2.72 per gallon, a price that has remained steady (within a couple of cents) since March. The average statewide kerosene price has also remained very steady over the last several months, and is now at $3.32 per gallon. The average propane price (for heating customers) has fluctuated several cents per gallon since March; this week's price stands at $2.67 per gallon for heating customers. The table below summarizes average prices since October 2017.

Date Average Residential Fuel Price,
per gallon, Maine 2017-18
Heating Oil Kerosene Propane
October 2017 $2.23 $2.86 $2.49
November 2017 $2.39 $3.01 $2.64
December 2017 $2.54 $3.14 $2.66
January 2017 $2.88 $3.48 $2.79
February 2017 $2.83 $3.47 $2.83
March 2018 $2.71 $3.36 $2.72
April 2018 $2.70 $3.34 $2.74
May 2018 $2.75 $3.35 $2.72
June 2018 $2.75 $3.35 $2.69
July 2018 $2.73 $3.33 $2.67

These more expensive heating fuel prices are primarily due to an increase in global crude oil prices. Just over two years ago, crude oil prices were the lowest observed in a decade. Since those market lows, prices have steadily increased due to several factors - an increase in global demand which lowered excess inventories; a decrease in shale oil production due to very low prices; and an agreement to cut production by OPEC members (The Organization of Petroleum Exporting Countries). Prices are now in the $68-$72 per barrel range https://www.bloomberg.com/markets/commodities . Current prices are high enough to support significant shale oil production, which places downward pressure on further global price escalation. In its June short term energy outlook, The U.S Energy Information Administration (EIA) forecasted crude prices to remain approximately where they are for the remainder of 2018, and slightly lower prices in 2019 https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf . However, these conditions could change if production in the U.S., Brazil, Canada, and Russia turns out to be lower than forecasted.

These steadily rising (and then leveling) prices for crude oil are reflected in the heating fuel price charts below.

Below is a table of prices collected for various regions of the state.

Maine Retail Heating Fuel Prices, as of July 30, 2018


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.73

2.70

2.72

2.77

2.66

2.88

High

2.96

2.90

2.90

2.96

2.90

2.90

Low

2.43

2.43

2.45

2.50

2.45

2.82

Kerosene

3.34

3.34

3.34

3.34

3.24

3.45

Propane

2.67

2.67

2.54

2.69

2.62

2.42

The following table compares the prices between various heating fuels, and converts these prices to a common heating unit value (dollars per million Btu). In January, when oil and natural prices were higher, wood pellets had a lower dollar cost on a heat value basis. This week, lower natural gas prices make this a lower cost fuel (on a strictly heat value basis).

Comparison of Heating Fuel Prices per Million Btu
(as of July 30, 2018)


Fuel Price (in dollars) Fuel Price (dollars per million Btu)
Cord Wood ($250/cord) $11.36
Natural Gas ($1.36/therm) $13.60
Wood Pellets ($268/ton) $16.24
Heating Oil ($2.72/gallon) $19.61
Kerosene ($3.32/gallon) $24.59
Propane ($2.67/gallon) $29.23
Electricity (baseboard) (15-17.5 cents/kwh) $42.50-$51.29

However, 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 $3.02, and the lowest heating oil price found was $2.45. 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