Market conditions in the northeast have brought wholesale heating oil prices as low as US$1.10 per gallon. Although heating oil usually sells for more than gasoline since it generates more heat when burned than gasoline, it has been trading for 10-15c per gallon less than gasoline over the past couple months. High inventories combined with a milder than average winter so far have caused a supply/demand imbalance that has pushed prices low.
Just after I wrote my last heating cost comparison, CBC ran an article about a shortage of pellets. Continued strong export demand for pellets (probably fueled by the low Canadian dollar) has kept pellet prices high. So far this season I have not seen pellets selling for less than C$5.99 per bag. While pellet prices have gone up by about 10%, the price of furnace oil has dropped by almost 25%. Since last week, independent dealers have been selling furnace oil for C$0.72 per litre.
Heating with pellets now costs 2.49c/kBTU, versus 2.38c/kBTU for oil. When taxes are accounted for pellets cost 2.87c/kBTU, and oil 2.5c/kBTU. Although there is a heating assistance rebate available for low income families heating with pellets, the provincial portion of the HST (10%) is rebated on all heating oil sales in the province. By those numbers, oil is 13% cheaper than pellets. If you have to pay for delivery for your pellets, the difference is likely more than 15%.
I don't expect pellet prices to improve, but I think oil prices are about as low as they will get this heating season. Time to fill up that tank!