Oil prices on the rise as winter plods on

By Eric Russell, BDN Staff
Posted Feb. 08, 2011, at 1:10 p.m.

AUGUSTA, Maine — The statewide average price of heating oil has gone up for the 10th consecutive week and now sits 67 cents higher than this time last year.

Mainers are paying an average of $3.35 per gallon for No. 2 heating oil, an increase of about 25 cents over one month ago. John Kerry, director of Maine’s Office of Energy Independence and Security, said consumer demand and instability in Egypt and elsewhere in the Middle East are the main contributing factors to the spike.

“It’s important to remember that petroleum is a worldwide commodity. When demand increases in other parts of the world, it affects us, too,” he said.

As usual, prices are higher in northern and eastern Maine, primarily because it costs more to transport the fuel to those areas, but also because competition is lacking, Kerry said. The lowest actual heating oil price found in the most recent OEIS survey was $3.12 per gallon in southwest Maine. The highest price, $3.53 per gallon, was found in northern Maine.

Although he hesitated to speculate on whether prices would continue rising, Kerry said inventory remains high. He also said oil prices were increasing before the political unrest in Egypt and added that maintaining energy-efficient homes and buildings remains one of the best options to manage heating fuel consumption.

The reasons behind the rise in heating oil prices are likely of little concern to homeowners who are struggling to get through a harsh winter. According to heating oil distributors in the Bangor area, more customers are opting for minimum deliveries instead of fill-ups, and they are enrolling in payment plans.

Late last month, U.S. Sen. Olympia Snowe, R-Maine, announced that Maine would receive an additional $23 million in emergency contingency funding through the U.S. Department of Health and Humans Services’ Low Income Home Energy Assistance Program. So far, Maine has received $51.7 million in heating aid from LIHEAP this season, about $1 million less than last winter, which was considerably more mild.

“We’re working closely with the Maine Energy Marketing Association, the Maine Housing Authority and Efficiency Maine to make sure residents aren’t going cold,” Kerry said.

Gov. Paul LePage spoke Tuesday about the spike in oil prices when he addressed the recent closure of Thibeault Energy in Brunswick, which has forced many to look elsewhere for their fuel. In an effort to assist those affected by the Thibeault closure, LePage announced two initiatives.

The first involves a special screening for LIHEAP fuel assistance for more than 40 former Thibeault Energy customers from 10 a.m. to 2 p.m. Saturday at the Curtis Memorial Library in Brunswick.

The second initiative brings together five area credit unions that have agreed to offer 12-month, zero-interest fuel-assistance loans of up to $2,000 to customers directly affected by the closure of Thibeault Energy.

“I hope there is very little need, but I am pleased to know that this loan assistance is being made available to get people through the winter,” LePage said.

This week’s average price is the highest in Maine since early October 2008. By comparison, the current statewide average price of kerosene is $3.72 per gallon. The average for propane based on a use of 925 gallons a year is $2.91 per gallon.

Many consumers who had the opportunity to lock into a fixed price last fall did not take advantage because they assumed the market would be stable, Kerry said. During the price crisis in 2008, many Mainers explored alternative heating options such as wood pellets, heat pump systems and natural gas.

Still, Kerry said Maine relies on heating oil to heat more than 70 percent of its homes.

http://bangordailynews.com/2011/02/08/news/oil-prices-on-the-rise-as-winter-plods-on/ printed on April 25, 2014