Rural Alaska heating fuel hits record $7.97 a gallon, state survey finds

Heating fuel in rural Alaska cost an average of $7.97 a gallon this summer, the highest price recorded since the state began tracking it in 2005, according to the Alaska Fuel Price Report released by the Alaska Division of Community and Regional Affairs (DCRA).

The survey covered 100 communities, almost all off the road system, surveyed between July 15 and Aug. 24. DCRA reached vendors in 97 of the 100 communities; it could not get pricing from Kwigillingok, where much of the population evacuated after Typhoon Halong, or from Atka and Saint George. The $7.97 average among the 90 communities reporting unsubsidized prices is 22.8% higher than the $6.49 average recorded in January, meaning families heating with several hundred gallons of fuel oil are paying hundreds of dollars more than they did six months ago.

Prices vary sharply by region. The Western region averaged $9.00 a gallon, the highest in the state, while the Gulf Coast region averaged $6.36. Arctic Village reported the highest price at $17.00 a gallon, followed by Hughes and Kokhanok at $15.00. Gasoline averaged $7.56 statewide, up 13.8% from January, with Kokhanok reporting the highest gasoline price in the survey at $14.50.

The national average price for heating fuel was $5.54 a gallon on March 30, according to the U.S. Energy Information Administration, meaning Alaska's surveyed communities paid 44% more than the rest of the country, the widest gap DCRA has recorded since 2023. DCRA's report attributes part of the increase to shipping disruptions rather than crude oil costs. At least one fuel vendor switched from sourcing fuel in Southeast Asia to the U.S. Gulf Coast, adding distance and cost.

Steve Colt, a research professor at the University of Alaska's Center for Energy and Power, told Alaska Beacon reporter James Brooks that prices have kept climbing since DCRA's August survey closed. U.S. diesel prices rose from $4.58 a gallon on July 6 to $6.20 by Oct. 5, which Colt said could push rural Alaska prices near $9 a gallon again by DCRA's next survey, scheduled for January 2027. "I fear the worst is yet to come," Colt said.

North Slope Borough communities aren't included in DCRA's average because residential heating fuel there is subsidized. In Anaktuvuk Pass, for example, residents pay $1.50 a gallon versus a $7.62 unsubsidized commercial rate.