November 23, 2024
Business

Maine gas prices drop back to summer levels

The weather over the past few days is not the only thing in eastern Maine that bears some semblance to summertime.

Temperatures may not yet have dropped significantly, but gas prices have since they soared at the end of August.

Several months ago, no one would have suggested that the price of $2.35 for a gallon of gas was low. In the summer of 2004, gas prices were less than $2 a gallon, but still were higher than at any other time in recent memory.

After Hurricanes Katrina and Rita struck the Gulf Coast, however, the average price of a gallon of gasoline in Maine skyrocketed to more than $3. Prices charged by many retailers since have fallen more than 70 cents back to where they were in July, making the prospect of filling up a tank of gas less onerous for motorists than it was in September and October.

Beth Nagusky, head of the state Office of Energy Independence and Security, said Tuesday that gas prices have come back down from $3 per gallon because refiners are keeping production high and imports from Europe also are higher than normal. The warm weather, she added, also is helping to lower gas prices by decreasing the overall demand for petroleum products.

“The demand for heating oil isn’t there yet,” she said.

This has helped reduce the cost of heating oil, but not by much, according to Nagusky’s office. In its weekly survey of heating fuel prices, OEIS indicated Monday that the statewide average cash price for heating oil was $2.43. This is 4 cents lower than the statewide average for the previous week, but still 42 cents higher than the average statewide price of one year ago.

Prices for kerosene and propane also had either decreased slightly or stayed the same since the previous week, but still were between 10 percent and 20 percent higher than last year’s prices, the survey indicated.

The real “wild card” for heating oil supplies over the winter will be the costs and availability of natural gas, according to Nagusky. She said the current low supply and high cost of natural gas could prompt some electricity producers to supplement their natural gas consumption with petroleum, which would limit the supply of refined oil products and likely drive up prices again.

Nagusky said the federal National Oceanic and Atmospheric Administration has predicted that this coming winter will be colder than last year. Regardless of whether this turns out to be true, the state is encouraging homeowners to conserve fuel and to improve the energy efficiency of their homes to help decrease the demand for heating oil during the cold months, Nagusky said.

“We may be getting a little rest here, but who knows for how long?” she said.

Jamie Py, president of the Maine Oil Dealers Association, said that the average gas price in Maine on Tuesday was 14 cents lower than the national average. Gulf Coast refineries are resuming production after having been damaged by hurricanes, he said, which in turn is helping to bolster gasoline supplies.

Py said it is too early to tell whether consumers have altered their behavior or purchasing patterns because of the high gas prices. How cold it gets this winter will be a “big factor” in the price of gasoline and heating fuel during the coming months, he said.

Matt McKenzie, spokesman for AAA Northern New England, said Tuesday that the combination of more efficient fuel usage by consumers and a wider range of energy production methods by oil companies likely will result in larger supplies of fuel and lower prices. In the shorter term, supplies should be easier to maintain because, despite the relatively warm weather, motorists are driving less as winter approaches, he said.

“Some analysts believe [gasoline prices] could be below the $2 range by the end of the year,” he said.

McKenzie also used the term “wild card,” however, saying that cold weather and a resulting higher demand for heating oil could affect the supply and price of gasoline. Though prices have come down, motor fuel still is more expensive than it historically has been, he said.

“Last year at this time, the average price of gasoline seemed unbelievably high at $2.03 per gallon,” McKenzie said.

According to MaineGasPrices.com, many Bangor retailers were charging around $2.35 Tuesday for a gallon of regular unleaded gas, though a few were charging less than $2.20 per gallon. The Web site indicated Tuesday that the same kind of gasoline was being sold for around $2.40 in Calais, Ellsworth and Houlton, while several stations in central Maine were charging less than $2.20.

According to AAA’s online Daily Fuel Gauge Report, the average price in the Bangor area Monday for a gallon of regular unleaded gasoline was just less than $2.36. This is 44 cents cheaper than the equivalent average price of one month ago, AAA indicated.

Oil prices on the New York Mercantile Exchange fell $1.46 Monday to settle below $60 for the first time in three months as forecasts of warmer weather sparked a wave of selling. After an initial decrease on Tuesday, however, oil prices rose nine cents to close at $59.85. In early September, after Hurricane Katrina disabled much of the oil industry infrastructure in the Gulf Coast region, oil futures briefly topped $70 a barrel.

The Associated Press contributed to this report.


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