Heating Fuel Prices Spike Upward; Global Oil Supplies Anticipated Tighter than Earlier Forecasts

October 2, 2018

Augusta, Maine - The Governor's Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, October 1, 2018, and found the current statewide average cash price for No. 2 heating oil was $2.88 per gallon, fourteen cents higher per gallon than a month ago. The average statewide kerosene price is up 11 cents, to $3.45 per gallon. The statewide average propane price has also climbed, up 9 cents over the last four weeks, to $2.77 per gallon (for heating customers). As the table below indicates, heating fuel prices have increased 3 to 4 percent since June. The table below summarizes averages prices over the last few months, and compares them to this week's prices.

Date Maine Average Residential Fuel Price,
per gallon, June through Sept. 2018
Heating Oil Kerosene Propane
June 2018 $2.75 $3.35 $2.69
July 2018 $2.73 $3.33 $2.67
August 2018 $2.71 $3.24 $2.68
September 2018 $2.78 $3.37 $2.70
October 1st prices $2.87 $3.45 $2.77

This upward creep of heating oil prices reflects the Energy Information Administration's (EIA) current short term energy outlook https://www.eia.gov/outlooks/steo/report/ . A month ago, the EIA forecasted crude oil prices would remain the same, and decline a little in 2019. This week, that forecast has changed to slightly higher prices for 2019. Updated production and price forecasts indicate that North American shale oil production will be slightly lower than earlier estimates, and reflect decreased Iranian exports in advance of the reinstatement of economic sanctions on that country. Both of these events have resulted in minor upward pressure on prices. Per barrel prices are now in the $69-$79 range, which is a few dollars higher than a month ago.

Below is a table of prices collected for various regions of the state, both this week as well as a month ago.

Maine Retail Heating Fuel Prices, as of October 1, 2018


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.88

2.84

2.89

2.91

2.79

3.04

High

3.10

3.10

3.10

3.10

3.10

3.10

Low

2.50

2.55

2.65

2.66

2.50

3.00

Kerosene

3.45

3.46

3.46

3.47

3.33

3.61

Propane

2.77

2.89

2.72

2.82

2.62

2.68

Propane prices are currently not as sensitive to global events as crude oil prices are. The U.S. is now the leading exporter of propane, so prices are influenced more by the strength of the export market (as well as weather) than by geopolitical events.

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 (October 1, 2018)

Fuel Price (in dollars) Fuel Price (dollars per million Btu)
Cord Wood ($275/cord) $12.50
Natural Gas ($1.21-$2.21/therm)* $12.14-$22.14
Wood Pellets ($268/ton) $16.24
Heating Oil ($2.87/gallon) $20.77
Kerosene ($3.45/gallon) $25.56
Propane ($2.77/gallon) $30.33
Electricity - baseboard (14-17.5 cents/kwh) $42.50-$51.29
Electricity - air source heat pump (5.2-6.5 cents/kwh)* $15.24-$19.05

*price varies depending on location; natural gas and electricity delivery companies service only selected areas of the state.
**ductless, air source heat pump calculations courtesy of Efficiency Maine


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, are also important factors 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 $3.10, and the lowest heating oil price found was $2.50. 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