US household winter heating costs to see double-digit growth: EIA
Energy prices climbed 1.3% in September and are now up 24.8% over the past year
The Energy Information Administration has warned that the cost of heating oil is expected to rise approximately 43% compared to last year to due to "higher expected fuel costs as well as more consumption of energy due to a colder winter."
Meanwhile, the agency expects propane costs to rise by 54%, natural gas costs to rise by 30% and electricity costs to rise by 6%.
According to the EIA's winter fuels outlook, the average U.S. household is expected to spend an average of $1,734 during the 2021-2022 winter season if using heating oil to heat their homes, up from $1,210 last year, $1,268 if using electricity, up from $1,192 last year, and $746 if using natural gas, up from $572 last year.
Depending on where people live, the EIA said residential costs will rise between roughly $11 to $14 per thousand cubic feet (mcf) for natural gas, compared to around $7 to 12 per mcf for natural gas last year, about $2.50-$3.50 per gallon for propane, compared to around $1.50-$2.50 per gallon for propane last year, and almost $3.50 per gallon for heating oil, compared to $2.50 per gallon for heating oil last year.
The nearly half of U.S. households that use natural gas could potentially spend 50% more in a colder-than-average winter and 22% more in a warmer-than-average winter, the 41% of U.S. households using electricity could spend 15% more in a colder winter and 4% more in a warmer winter, the 5% of households using propane could spend 94% more in a colder winter and 29% more in a warmer winter, and the 4% of households using heating oil will could spend 59% more in a colder winter and 30% more in a warmer winter.
"As we have moved beyond what we expect to be the deepest part of the pandemic-related economic downturn, growth in energy demand has generally outpaced growth in supply," EIA acting Administrator Steve Nalley said. "These dynamics are raising energy prices around the world."
The forecast comes as the consumer price index rose 5.4% year over year in September, according to the Labor Department, matching July's reading for the hottest print since 2008. Prices increased 0.4% month over month.
Energy prices climbed 1.3% in September and are now up 24.8% over the past year. Food prices, meanwhile, jumped 0.9% last month and are now up 4.6% annually. Prices for meats, poultry, fish, and eggs, have climbed 10.5% this year while beef prices are up 17.6%. Core prices, which exclude food and energy, ticked up 0.2% in September and 4% annually, matching analysts' expectations.