Winter heating bills set to jump as inflation hits
NEW YORK — Get ready to pay sharply higher bills for heating this winter, along with seemingly everything else.
With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said it expects households to see their heating bills jump as much as 54% compared to last winter.
Nearly half the homes in the U.S. use natural gas for heat, and they could pay an average $746 this winter, 30% more than a year ago.
The second-most used heating source for homes is electricity, making up 41% of the country, and those households could see a more modest 6% increase to $1,268. Homes using heating oil, which make up 4% of the country, could see a 43% increase — more than $500 — to $1,734. The sharpest increases are likely for homes that use propane, which account for 5% of U.S. households.
This winter is forecast to be slightly colder across the country than last year. That means people will likely be burning more fuel to keep warm, on top of paying more for each bit of it. If the winter ends up being even colder than forecast, heating bills could be higher than estimated, and vice-versa.
The forecast from the U.S. Energy Information Administration is the latest reminder of the higher inflation ripping across the global economy.
Earlier Wednesday, the government released a separate report showing that prices were 5.4% higher for U.S. consumers in September than a year ago. That matches the hottest inflation rate since 2008, as a reawakening economy and snarled supply chains push up prices for everything from cars to groceries.
The higher prices hit everyone, with pay raises for most workers so far failing to keep up with inflation. But they hurt low-income households in particular.
“After the beating that people have taken in the pandemic, it's like: What's next?” said Carol Hardison, chief executive officer at Crisis Assistance Ministry, which helps people in Charlotte, N.C., who are facing financial hardship.
She said households coming in for assistance recently have had unpaid bills that are roughly twice as big as they were before the pandemic. They're contending with more expensive housing, higher medical bills and sometimes a reduction in their hours worked.
“It's what we know about this pandemic: It's hit the same people that were already struggling with wages not keeping up with the cost of living,” she said.
To make ends meet, families are cutting deeply. Nearly 22% of Americans had to reduce or forego expenses for basic necessities, such as medicine or food, to pay an energy bill in at least one of the last 12 months, according to a September survey by the U.S. Census Bureau.
Many of those families are just now getting through a hot summer where they faced high air-conditioning bills.
The biggest reason for this winter's higher heating bills is the recent surge in prices for energy commodities after they dropped to multi-year lows in 2020. Demand has simply grown faster than production as the economy roars back to life following shutdowns caused by the coronavirus.
Natural gas in the United States has climbed to its highest price since 2014 and is up roughly 90% over the last year. The wholesale price of heating oil has more than doubled in the last 12 months.
Another reason for the rise is how global the market for fuels has become.
