A silver lining in many an economic downturn: low-cost heating oil.
But not this time.
The statewide average price in Maine is already 78 cents a gallon higher than early September 2010, roughly $3.34 a gallon.
“That’s a lot of money to people,” said Kenneth Fletcher, director of the state Office of Energy Independence and Security.
He said the price per gallon could hit $4 this winter.
“I think a definite possibility is we could see $5,” said Dave Gendron, owner of Big G Fuel in Greene who was making deliveries Friday at $3.75 a gallon.
Current prices aren’t about demand, said Jamie Py, president of the Maine Energy Marketers Association (formerly the Maine Oil Dealers Association). It’s about speculation and heavy trading on the commodities market.
The weak dollar isn’t an appealing investment, he said. Commodities such as cotton, coffee and crude are appealing, even among those who don’t have commercial uses for crude.
“There’s testimony in Congress, this could be as much as a $1 to $1.50 a gallon that’s just tied up in the whole trading schematic,” Py said. “Until that gets brought under control, who knows what’s going to really happen in the marketplace? The whole thing could crash tomorrow or it could go up.”
He added, “That’s not comforting to consumers.”
State economist Amanda Rector said that given Maine’s dependence — nearly 80 percent of homes rely on heating oil or kerosene, the highest percentage in the country — she has “great concern” about the rising prices.
“It means added strain on Mainers’ budgets,” she said. “People and businesses will have to cut back even further on other spending, which could hinder economic growth.”
Applications opened Aug. 1 for the low-income heating assistance program. Kirsten Figueroa, director of energy and housing services at MaineHousing, said 63,000 people received an average benefit of $800 last winter. The federal program’s budget this winter is being debated in Congress.
One known: The federal government changed eligibility guidelines for most people this year, from those earning up to 170 percent of the federal poverty line to 150 percent.
Local community action programs that help clients apply for LIHEAP canvassed people who may no longer be eligible, Figueroa said. Between 50 and 80 percent said their incomes had deteriorated over the past year. They would still qualify.
“A couple (of community action agencies) started late and they’re already backlogged,” she said. “They are gearing up for a busy winter.”
Fletcher said the state will start releasing its weekly look at oil prices in October. He said it’s not too late to consider alternative energy sources and an energy-efficiency checkup.
A rough guide: An efficient 2,000-square-foot house should use about 1,000 gallons of heating oil a year.
“If you’re using more than that, there’s probably a real opportunity for people to save money,” Fletcher said. “If you’re at that or lower, you still might be able to save some money but it might not be as quickly.”
Gil Arsenault, Lewiston’s director of Planning and Code Enforcement, said Lewiston and Auburn got together when oil prices soared several years ago and drew up a protocol of what to do when a landlord lets a tank run dry because the landlord can’t afford to fill it.
“Tenants need to call us,” Arsenault said. “Tenants also need to be smart consumers.”
As they’re apartment hunting, he said, find out whether a landlord has a record of letting a building go without heat.
Gendron, at Big G Fuel, said he had noticed two trends. Many customers are using heating oil as backup, switching to wood, pellets or natural gas, and many ordered more heating oil throughout the summer so they’d come into fall topped off.
He’s thankful that people haven’t blamed him for prices, he said.
“Being a small family business, a lot of my customers are friends. They realize I’m just a re-seller,” Gendron said.
When customers ask for advice, he points them toward independent contractors who can clean a furnace and calibrate it to use the least amount of oil possible.
“I’d rather they recommend me to three friends than use three times as much,” he said.
Home heating oil prices over four years
Oct. 8, 2007: $2.70
March 17, 2008: $3.79
Oct. 6, 2008: $3.52
March 16, 2009: $2.06
Oct. 5, 2009: $2.41
March 15, 2010: $2.83
Sept. 27, 2010: $2.59
March 21, 2011: $3.66
Source: Maine Office of Energy Independence and Security
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- Big G Heating Fuel’s Dave Gendron prepares to top off an oil tank on Fortin Street in Lewiston on Friday afternoon. Gendron’s fuel costs a bit more, but it’s all about the service, he said. “If you catch me before 9 a.m. and your fuel tank is empty, there is no extra charge.” Also, he buys his oil locally, instead of in New Hampshire or Massachusetts where the wholesale prices might be lower.
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