PORTLAND – Along with robins and crocuses, a welcome sign of spring across northern New England is watching the heating season wind down. That usually signals a drop in the price of heating oil, but that hasn’t been the case this year.

After months of soaring fuel bills, prices remain at least as high as they’ve been at any time this winter, offering little relief to hard-pressed households.

In Maine, the average cash price for No. 2 oil hit a season high of $3.78 a gallon three weeks ago when the state Office of Energy Independence and Security compiled its final price survey of the season. That was $1.39 higher than at the same time last year.

New Hampshire’s average price during the third week of March was $3.85, a jump of more than $1 since the heating season began last fall. Vermont has seen similar price hikes.

“If the normal supply and demand forces were at work today, you would see prices start to decline around now,” said Jamie Py, president of the Maine Oil Dealers Association. “There’s no good reason why heating oil prices should be at the level they are today.”

High crude oil costs and growth in worldwide demand for distillate fuels – especially diesel – have put pressure on heating oil prices. Diesel, which essentially is heating oil with lower sulfur content, has become the fuel of choice for motorists in most of the world and is powering the robust economic growth in China and India.

Py also pins much of the blame on commodities speculators, saying Congress should step up regulation to prevent market manipulators from driving up prices.

“It’s easy to say prices should be a dollar less, but at the same time if that speculation isn’t checked, it could be a dollar more,” he said.

The price rise over the last winter has proven costly to Mainers, where the average home burns slightly more than 1,000 gallons a year, according to Ian Burnes, deputy director of policy and planning with the state energy office. Based on average prices at the beginning and end of the winter, the average fuel bill has jumped to $3,814, an increase of nearly $1,100.

It could have been worse. The National Weather Service in Gray said heating degree days for the past winter were slightly below normal in Concord, N.H., and Portland, which translates to a savings in number of gallons used.

Neither Py nor Burnes would venture a guess as to where heating oil prices go from here.

“It’s such a volatile market,” Burnes said. “The prognostications are all over the map.”

That could mean tough decisions in three months or so when homeowners are forced to choose whether to sign up for the various price-protection plans for the coming winter. Those who opted for their dealers’ fixed-price or price-cap programs last summer were spared this winter’s huge price rise.

If prices decline sharply next winter, consumers who sign up this time will have lost their bet. Py has no crystal ball and isn’t giving out advice. But if history is any guide, he said, those who choose price protection can get burned year-to-year but generally do better over the long run.

A surer bet this year, according to Burnes and Py, is investing in heating system upgrades and other improvements that will cut fuel bills. With the higher oil prices, the payback period for such expenditures is a lot shorter than it used to be.

“Now is the time to start thinking about weatherizing your house for next winter,” said Burnes. He suggested that Mainers consider investing the government’s economic stimulus checks due to arrive next month into projects that will pay permanent dividends.


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