Winter heating costs are expected to jump nationwide due to the Iran war – with residential customers across the Northeast who use home heating oil getting slammed with spikes as high as 70%, according to a report.
American households are projected to spend an average of $1,002 on home heating this year – a 7.1% or $66 increase from last winter, according to a new forecast from the National Energy Assistance Directors Association (NEADA).
But households in New York and nearby states that rely on heating oil will see their costs rise to $2,977 this winter – a 70.2% jump from $1,749 last year, according to NEADA.
Electricity and propane costs are projected to increase 6% and 5%, respectively. Natural gas costs are expected to remain roughly the same.
Heating oil, however, is essentially the same distillate as diesel, which is also used to make jet fuel.
Refiners facing shortages have been forced to make choices about whether to produce jet fuel or heating oil – which could worsen shortages further, according to Joe Adamski, managing director of ProcureAbility, a supply chain consultancy.
“Heating oil costs are a direct consequence of the Iran war,” Adamski told The Post. “We have been saying for months that come winter, heating oil was going to be at a premium due to Gulf events, and now we have arrived.”
Heating oil is primarily used in older homes built before 1990, which are largely concentrated in the Northeast region.
About 59% of Maine households, 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 US Census Bureau data.
Winter heat is poised to become an extra pain point as families are already struggling to keep up with rising food and gasoline prices.
“For higher-income households, these increases may 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 rising costs for food, housing and other necessities. Adding hundreds or even thousands of dollars to their winter heating bills will push many of them further into debt.”
Despite stubbornly high inflation, consumer spending has remained strong – but Americans have increasingly fallen into debt to keep up, 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 – reached 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 US families said they have reduced the heating and cooling in their homes to uncomfortably low levels to save money, and 19% said they cut back on groceries or switched to less expensive food options, according to a Consumer Reports survey from August.
Oil prices have fallen recently as President Trump signaled he’s not planning to strike Iran anytime soon and is instead continuing negotiations. Gasoline prices on Tuesday fell below $4 a gallon for the first time since mid-July, according to AAA.
National average residential heating oil prices fell to $6.14 a gallon, down from $6.23 a gallon, in the week ending Nov. 2, according to the US Energy Information Administration – but are still roughly 69% higher than the same time last year.
Adamski also noted that experts are forecasting a milder start to the winter season due to a strong El Niño pushing the jet stream further south and east, which could mitigate heating oil usage and keep average costs lower.
“While the recent decline in heating oil prices is welcome news, families should not assume that prices will continue to fall,” Wolfe said. “The situation in the Strait of Hormuz remains highly volatile, and continued uncertainty about global oil supplies makes it difficult to predict where prices will go.”
“For planning purposes, we believe it is prudent to assume that heating oil prices will remain elevated throughout the winter heating season. We hope we’re wrong, but states need to prepare for the possibility that prices will stay high.”
