Samantha Croteau has seen the price of home heating oil rise all season; still, she’s feeling sticker shock.

The heating season in Maine opened with prices higher than last year’s, and the statewide average price of No. 2 heating oil has been steadily creeping up since then. It topped $3 this month for the first time since 2008, and it’s not clear whether consumers will be getting any relief before winter is over.

As a result of those climbing costs, she sets the thermostat lower, limits her heating oil purchases to 100-gallon deliveries and has made blankets the preferred winter accessory at her Cape Elizabeth home.

“Not only are the heating prices up, it’s colder,” said Croteau, a receptionist. “It’s more all the way around, so it is painful. But it’s not something you can go without.”

A weaker dollar, manufacturing growth in China and cold weather in the Northeast and Europe are among the factors that have pushed up the prices of crude oil and heating oil. That’s according to the Governor’s Office of Energy Independence and Security, which surveys prices from early October through mid-March.

Demand tends to increase as winter goes on and the weather gets colder, but it’s tough to predict the future of oil prices, said Jeff Marks, the office’s deputy director.

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“It’s difficult to look into the crystal ball because of the various factors that might cause them to fluctuate,” he said.

The statewide average price last week was $3.18 per gallon, an increase of 27 cents, or about 9 percent, from a year ago. The lowest actual price seen in the weekly survey — $2.98 per gallon — was in southwestern Maine. The highest actual price of $3.44 per gallon was in the northern region.

Still, prices remain below the levels seen in 2008, when they approached $5 a gallon during the summer. The spike had consumers weighing whether to commit to price-protection programs before winter or gamble on prices dropping. Others were scrambling to buy alternative heating systems, such as pellet and wood stoves, which ended up on back order for those who acted too late.

Oil prices then tumbled as the effects of the recession set in.

Steve Giroux, president of Giroux Oil Service Co., is seeing the effect of rising prices in his past-due accounts.

“They’re paying slower because I don’t think most homes budgeted for these types of oil and gas prices we’re seeing now,” said Giroux, whose company works in Cumberland County and part of York County.

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Giroux said the percentage of customers locking in prices over the summer was down from the year before. He believes that at the time they were expecting more stability in prices.

State law requires dealers to secure enough heating oil to cover what customers have committed to through pre-buy programs, said Jamie Py, president of the Maine Energy Marketers Association, which changed its name from the Maine Oil Dealers Association to reflect that its members have branched into other areas.

Dealers can buy the right to purchase oil at a given price later or simply buy it any time at the going rate, he said.

Investor demand is a major factor in driving the price of oil, Py said. In the future, he said, the price may also depend on whether the government takes steps to more strictly regulate how much influence investors have over oil prices.

Government restrictions on oil and gas development domestically could also lead to higher prices in the summer, he said.

The $3-per-gallon mark seems to be a threshold for consumer awareness, said Michael Stoddard, executive director of Efficiency Maine, a quasi-public agency set up by state officials to oversee energy efficiency and conservation programs.

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“When that happens, there’s something psychological that happens to people,” he said, “And they say, ‘Is there an alternative?’

Stoddard doesn’t have data about the recent past, but said that more homeowners and small business owners are looking for cheaper ways to heat with every week that the price of heating fuel goes up.

Consumers who made energy upgrades through Efficiency Maine saw average savings of 36 percent — or more than $1,000 a year with current prices, he said.

The increase in oil prices hasn’t led to a sudden run on alternative heating fuels such as wood pellets and bioproducts, according to Bob Maurais, who along with his brother Ed owns Southern Maine Renewable Fuels in Wells and Windham. Demand going into this heating season was fairly static — unlike 2008, when demand outstripped supply, he said.

The majority of his customers bought much of their supply of pellets and bioproducts in early fall, he said. These days, purchases tend to be smaller ones to get through the season, he said.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

akim@pressherald.com

 


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