I don’t think any one item is going to explain it all away.
Going back a few years the EPA regulations for ULSD greatly impacted pricing on distallates. The home heating oil does not have that requirement, but gets impacted by the regulation.
http://www.ilta.org/LegislativeandRegulatory/MVNRLM/ULSDinfo.htm
Keeping the fuels separate in the refinery adds cost and some smaller refineries may not be economically able to do so. The result will be that the home heating oil will compete with the ultra low sulfur diesel market.
But I have to question the claim that it was half the price of gasoline a few years ago.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=W_EPD2F_PRS_NUS_DPG&f=W
Heating oil may not have been half the price of gasoline on average throughout the year. However, we would typically buy heating oil at its lowest price in August and lock in the price of the contract for the heating season.
It may not have been half, but it was always cheaper than gasoline. Even if heating oil could be exchanged for diesel, they still need to add the federal and state taxes onto the price. That alone is atleast a $.40/gallon difference.