skyrocketing energy costs

The average price of a gallon of heating fuel — No. 1 diesel — in rural Alaska reached a record $7.97 per gallon in August, according to the latest biannual survey conducted by the Alaska Division of Community and Regional Affairs.

The rural average, based on a survey of 100 communities taken between July 15 and Aug. 24, was up 23% from January and the highest nominal price on record since the survey began in 2005. 

Adjusted for inflation, prices were higher in 2008-2009 and 2011-2014. But Steve Colt, research professor at the University of Alaska’s Center for Energy and Power, noted that heating fuel prices have continued to climb since the state conducted the summer survey.

By the time the next survey takes place in January, prices could be at an inflation-adjusted record as well.

“I fear the worst is yet to come,” he said by email.

In July, rural Alaska diesel prices were 44 percent higher than the national average. 

On July 6, the U.S. average price of diesel was $4.58. That had risen to $6.20 by Oct. 5, indicating that rural Alaska prices may now be near $9 per gallon. 

That was already the average price in Western Alaska this summer; other rural areas, particularly in Southeast Alaska, had lower prices.

Local prices vary, depending on when the local community ordered its fuel and when it arrived by barge; only a handful of surveyed rural communities in eastern Interior Alaska have road connections. 

Ordinarily, rural Alaska sources its fuel from Asia, but the U.S. war on Iran has caused shortages in that region. At least one company supplying rural Alaska switched to fuel from the Gulf of Mexico instead, adding shipping costs. 

In July, DCRA’s survey found the average rural price of gasoline was $7.56 per gallon, up 14% from January.

Prices in some communities were well above that average, including in Kokhanok, which had the highest reported price, at $14.50 per gallon. Hughes reported $13 per gallon, Grayling $12.50 and Arctic Village $12 per gallon.

The new survey does not include Shungnak, where prices exceeded $26 per gallon in August due to a local shortage and the need to fly in fuel.