Winter heating bills will go up when inflation comes home

Amber Cox shovels snow from the porch roof of her home in Auburn, Maine on March 8, 2018. In light of soaring prices for heating oil, natural gas and other fuels around the world, the US government said on Wednesday, October 13, 2021 that it expects households to see their heating bills up to 54% compared to last winter. (Daryn Slover, Sun Diary)

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NEW YORK – Get ready to pay significantly higher heating bills this winter, along with seemingly everything else.

Amid rising prices for heating oil, natural gas and other fuels around the world, the US government expected on Wednesday that household heating bills will increase by up to 54% compared to last winter.

Nearly half of households in the US use natural gas for heating, and they could pay an average of $ 746 this winter, 30% more than a year ago. Those in the Midwest could find themselves particularly under pressure with an estimated 49% higher bills, and this could become the most expensive winter for natural gas-heated homes since 2008-2009.

The second most widely used source of heat for households is electricity, which accounts for 41% of the country, and those households could see a more modest increase from 6% to $ 1,268. Homes using heating oil, which makes up 4% of the country, could see a 43% increase – more than $ 500 – to $ 1,734. The sharpest increases are likely for homes using propane, which make up 5% of US households.

This winter is expected to be a little colder across the country than last year. That means people are likely to burn more fuel to keep warm and also pay more for each piece of it. If the winter is even colder than forecast, heating costs could be higher than expected and vice versa.

The US Energy Information Administration forecast is the latest reminder of the higher inflation pervading the global economy. Early on Wednesday, the government released a separate report showing US consumer prices were 5.4% higher in September than a year ago. That’s the highest rate of inflation since 2008 as a re-awakening economy and knotted supply chains drive prices up for everything from cars to groceries.

The higher prices hit everyone, and the wage increases for most workers have so far not kept pace with inflation. But they mainly harm low-income households.

“After the blows people took in the pandemic, it’s like, what’s next?” said Carol Hardison, chief executive officer of the Crisis Assistance Ministry, which serves people in Charlotte, North Carolina who are in dire financial straits.

She said households that recently sought help had unpaid bills roughly double what they were before the pandemic. They struggle with more expensive housing, higher medical bills and sometimes a reduction in their working hours.

“It’s what we know about this pandemic: it’s met the same people who have already struggled with wages that couldn’t keep up with the cost of living,” she said.

To make ends meet, families cut deep. Nearly 22% of Americans have had to cut or go without spending on basic necessities such as medication or groceries in at least one of the past 12 months to pay an energy bill, according to a September poll by the US Census Bureau.

“This will cause significant difficulties for people in the lower third of the country,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Association. “You can tell them to turn the heat down at night and try to turn the heat down, but many low-income families are already doing that. Energy was unaffordable for them anyway. “

Many of these families are just getting through a hot summer faced with heavy air conditioning bills.


This is what we know about this pandemic: it has hit the same people who have already struggled with wages that couldn’t keep up with the cost of living.

–Carol Hardison


Congress allocates some money to energy aid programs for low-income households, but the directors of those programs are now watching their purchasing power shrink as fuel costs continue to rise, Wolfe said.

The main reason for the higher heating bills this winter is the recent surge in energy commodity prices after falling to multi-year lows in 2020. Demand has simply grown faster than production as the economy comes back to life after the shutdowns caused by the coronavirus.

Natural gas, for example, has reached its highest price since 2014 and has increased by around 90% compared to last year. The wholesale price for heating oil has more than doubled in the last 12 months.

Another reason for the increase is the globalization of the fuel market. In Europe, strong demand and limited supply have pushed natural gas prices up more than 350% this year. As a result, some of the natural gas produced in the USA is sent to ships in other countries, which also increases the upward pressure on domestic prices.

According to Barclays analyst Amarpreet Singh, the amount of natural gas in inventory is relatively small. That means there is less padding for the winter heating season.

The price of heating oil, on the other hand, is closely linked to the price of crude oil, which has risen by more than 60% this year. Homes affected by these increases are mainly in the northeast, where the proportion of households using heating oil has decreased from 27% to 18% over the past decade.

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