Millions of Americans are facing a sharp rise in home heating costs this winter as global energy prices remain high. The problem is especially serious for households that depend on heating oil to keep their homes warm during cold weather.
Heating oil prices are expected to rise 50% this winter, according to an estimate from the National Energy Assistance Directors Association (NEADA). The increase could add nearly $900 to the average household's heating bill, putting more pressure on family budgets, Yahoo Finance reported.
Around 4.8 million US households use heating oil to warm their homes. Most of these households are in the Northeastern US and Alaska, where cold winters make home heating essential.
"There's a lot of sticker shock," said Chris Herb, president of the Connecticut Energy Marketers Association, a trade group representing local fuel providers and other energy companies in the state.
The Iran war and Ukrainian attacks on Russian oil refineries are adding to the supply problems. Heating oil is almost identical to diesel, making diesel prices an important indicator of what households may pay for heating oil. Diesel prices have continued to climb even as crude oil prices have levelled off, as seasonal demand increases and supply disruptions continue, according to Yahoo Finance.
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Record-high heating oil and diesel prices
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Record-high heating oil and diesel prices
{{/usCountry}}Diesel prices have crossed $6.50 per gallon in recent weeks, breaking their previous all-time record. Heating oil prices across Northeastern states have also recently reached, or come close to, their highest levels on record.
Heating oil is already costing nearly $6 per gallon in some Northeastern states. The average price is around $5.96 per gallon in Maine, $5.87 in Vermont and $5.91 in Connecticut, according to the figures cited by Yahoo Finance.
A 100-gallon heating oil order can now cost nearly $600. For example, at $5.96 per gallon in Maine, 100 gallons would cost $596 before any additional charges. Orders of 100 gallons are a common minimum purchase requirement.
The high prices are forcing homeowners to make difficult decisions. They must decide whether to buy heating oil now in case prices rise further, wait in the hope that prices fall, invest in alternative heating systems or lower their thermostats to make their existing supplies last longer.
Families are unsure whether to buy heating oil now
Some households are buying heating oil earlier than usual because they fear prices could rise further. Chris Herb said suppliers in Connecticut were seeing more business than is typical for September, possibly because families no longer wanted to wait for prices to fall.
A Maine resident has been quoted $5.99 per gallon for heating oil. KC, who lives near Augusta and asked that her last name be withheld to protect her privacy, recently received the quote for a 100-gallon order. She could end up paying even more if prices increase before the delivery arrives
KC, 51, said she typically paid around $3 per gallon in a normal year. The new quote was therefore a major jump from what she was used to paying.
"I was shocked, honestly, to find out that oil was this much," KC said. She knew prices were rising but did not understand how sharply they had increased until about a month earlier, when a colleague at her healthcare job mentioned paying around $5 per gallon, as cited by Yahoo Finance.
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How households are trying to reduce heating bills
KC is planning to reduce her use of heating oil to control her winter expenses. She intends to set her thermostat to 50 degrees, the lowest temperature she believes she can maintain without risking frozen pipes, and depend mainly on her two pellet stoves for heat.
Simple home improvements could help families save money on heating. Chris Herb said weatherproofing measures, known as weatherization, and regular heating system tune-ups can reduce a typical heating bill by up to 10%.
"Ten percent at these levels is meaningful, meaningful money back in your pocket," Herb said, highlighting the savings that even a modest reduction in energy use could provide when fuel prices are so high, according to Yahoo Finance.
Government assistance for families struggling with heating costs
Low-income households may qualify for federal help with their energy bills. The federally funded Low Income Home Energy Assistance Program (LIHEAP) provides grants to eligible households to help them manage heating and other energy costs.
Several states also run assistance programmes for low- and moderate-income families. However, rising heating costs have raised questions about whether these programmes will provide enough support this winter.
A bipartisan group of US senators is pressuring the Trump administration to release this year's energy assistance funds earlier than planned. Several bills have also been introduced to expand the assistance programme.
Maine's senators want President Donald Trump to use the federal emergency heating oil reserve to help control costs. Senators Susan Collins and Angus King have asked Trump to release some of the government's one-million-barrel emergency supply of heating oil.