The current global energy crisis isn’t just causing problems at the gas pump: As winter approaches, millions of Americans are facing dramatic increases in their home heating costs.
The price of fuel oil, which some 4.8 million households, mainly in the Northeast and Alaska, use to heat their homes, is nearing all-time highs as two wars strain global supplies.
Heating oil costs are expected to rise 50% this winter, according to an estimate from the National Energy Assistance Director Association, adding nearly $900 to the average home’s heating bill. The increase surprises consumers at a time of year when many households are filling their tanks for the winter, and it raises concerns that high prices will force low-income families to make difficult choices between heating their homes and paying for basic necessities.
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“There’s a lot of shock,” said Chris Herb, president of the Connecticut Energy Marketers Association, a trade group for local fuel suppliers and other energy companies in the state.
Fuel oil is almost identical to diesel, and diesel prices continued to rise while crude oil prices have plateaued as higher seasonal demand collides with ongoing supply shocks. The war in Iran has disrupted exporters’ ability to reliably transit the Strait of Hormuz, while escalating Ukrainian attacks on Russian oil refineries have limited another key source of supply.
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Record prices
In recent weeks, diesel prices have exceeded $6.50 per gallon, breaking an all-time high. And in the Northeast states, heating oil prices have recently broken or are just below the highest levels on record.
“Diesel and fuel oil are now basically directly linked,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “Diesel setting all-time highs is certainly very concerning for home heating oil spending this winter.”
A gallon of heating oil now costs an average of about $5.96 in Maine, where more than half the state relies on oil, the highest share in the nation. Prices are $5.87 in Vermont and $5.91 in Connecticut, meaning 100 gallons, a common minimum order threshold, comes to nearly $600.
During the winter months, a typical home running solely on heating oil can use 100 gallons in a few weeks.
Owners were faced with difficult choices: stock up now, or wait and hope prices drop in the coming months? Are you looking for alternative heating sources that might be expensive up front but save money in the long run? Lower the thermostat and shiver to stretch the amount of oil in a tank longer?
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