Winter heating costs are set to rise across the country due to the war in Iran – with residential customers in the North East who use home heating oil facing rises of up to 70%, according to a report.
U.S. households are expected to spend an average of $1,002 on heating their homes this year, an increase of 7.1% or $66 from last winter, according to a new forecast from the National Energy Assistance Director Association (NEADA).
But households in New York and neighboring states that rely on heating oil will see their costs rise to $2,977 this winter, up 70.2% from last year’s $1,749, according to NEADA.
Electricity and propane costs are expected to increase by 6% and 5%, respectively. Natural gas costs are expected to remain about the same.
However, fuel oil is essentially the same distillate as diesel, which is also used to make jet fuel.
Refiners facing shortages have been forced to make choices between producing jet fuel or heating oil — which could make shortages even worse, according to Joe Adamski, managing director of ProcureAbility, a supply chain consultancy.
“Fuel oil costs are a direct result of the war in Iran,” Adamski told the Post. “We have been saying for months that next winter fuel oil would be very expensive due to events in the Gulf, and now we have arrived. »
Fuel oil is primarily used in older homes built before 1990, which are largely concentrated in the Northeast region.
About 59% of households in Maine, 43% in New Hampshire, 40% in Vermont, 39% in Connecticut, 29% in Rhode Island, 24% in Massachusetts, 19% in New York and 16% in Pennsylvania rely on heating oil, according to U.S. Census Bureau data.
Winter heat is poised to become an additional problem as families already struggle to cope with rising food and gasoline prices.
“For high-income households, these increases can be an inconvenience. For low- and middle-income families, they can be devastating,” Mark Wolfe, executive director of NEADA, said in a statement.
“Families are already struggling with the rising costs of food, housing and other necessities. Adding hundreds or even thousands of dollars to their heating bills in winter will push many further into debt.”
Despite stubbornly high inflation, consumer spending has remained strong – but Americans have taken on more and more debt to keep pace, according to data from the New York Fed on Tuesday.
Credit card balances hit a record $1.29 trillion in the third quarter and total household debt – including mortgages, auto loans and student loans – hit a record $19.1 trillion.
Americans are already struggling to pay their utility bills. About one in six households are behind on their payments – owing about $23 billion, NEADA said.
More than a quarter of American families said they turned down their home heating and cooling to uncomfortably low levels to save money, and 19% said they cut back on groceries or opted for cheaper food options, according to an August Consumer Reports survey.
Oil prices have fallen recently as President Trump has indicated that he does not plan to strike Iran anytime soon and is instead continuing negotiations. Gasoline prices fell below $4 a gallon on Tuesday for the first time since mid-July, according to AAA.
According to the U.S. Energy Information Administration, national average prices for residential heating oil fell to $6.14 per gallon, from $6.23 per gallon, in the week ending Nov. 2, but are still about 69% higher than the same period last year.
Adamski also noted that experts are predicting a milder start to the winter season due to a strong El Niño pushing the jet stream farther south and east, which could ease heating oil consumption and keep average costs lower.
“While the recent drop in heating oil prices is good news, families should not assume that prices will continue to fall,” Wolfe said. “The situation in the Strait of Hormuz remains very volatile and continued uncertainty over global oil supplies makes it difficult to predict price developments. »
“For planning purposes, we think it is safe to assume that fuel oil prices will remain high throughout the winter heating season. We hope we are wrong, but states should prepare for the possibility that prices will remain high.”
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