Amber Cox moved the snow off the porch of her home in Auburn, Maine on March 8, 2018. As worldwide prices for heating oil, natural gas and other fuels rise, the U.S. government on Wednesday, October 13, 2021 saw homes jump by 54% for their heating bills compared to last winter. (Darin Slover, Sun Journal)
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NEW YORK – Get ready to pay a hefty bill for heating this winter, among other things.
As worldwide prices for heating oil, natural gas and other fuels rise, the U.S. government said Wednesday it expects home heating bills to rise by 54% compared to last winter.
Nearly half of homes in the U.S. use natural gas for heating, and this winter they can pay an average of $ 746, up 30% from a year ago. People in the Midwest may be particularly concerned, with the bill approximately 49%, and this could be the most expensive winter for natural-gas heating homes since 2008-2009.
The second most widely used heating source for homes is electricity, which accounts for 41% of the country, and a 6% more modest increase in those homes could reach $ 1,268. Homes using heating oil, which make up 4% of the country, could grow by 43% – more than $ 500 – to $ 1,734. Homes that use propane are likely to see a sharp increase, which is 5% of American households.
It is expected to be a little colder across the country this winter as compared to last year. This means that people will burn more fuel to stay warm, paying more for each of those parts. If the winter gets colder than forecast, the heating bill may be higher than expected and vice versa.
The U.S. Energy Information Administration forecast is the biggest reminder of high inflation in the global economy. Earlier on Wednesday, the government released a separate report showing that prices for American consumers in September were 5.4% higher than a year earlier. It coincides with the highest inflation rate since 2008, as the revived economy and declining supply chains push up prices of everything from cars to groceries.
Rising prices hit everyone, most workers have so far failed to cope with inflation due to wage increases. But it especially hurt low-income families.
“After being beaten by people with epidemics, it’s like this: what’s next?” Carol Hardison, chief executive of the Department of Crisis Assistance, who helps people in Charlotte, North Carolina, who are facing financial difficulties.
She said families who have recently come to help have exhausted bills that are twice as large as before the epidemic. They are struggling with more expensive housing, higher medical bills and sometimes a reduction in their hours.
“We know about this epidemic: it’s the people who are already struggling with wages, without the cost of living,” she said.
To meet the end, families are cutting deep. According to a September survey by the U.S. Census Bureau, nearly 22% of Americans have had to reduce or avoid spending on basic necessities, such as medicine or food, to pay their energy bills at least once in the past 12 months.
“This is going to be a significant problem for people in the bottom third of the country,” said Mark Wolf, executive director of the National Energy Assistance Directors Association. “You can tell them to reduce it and try to reduce the heat at night, but many low-income families already do that. Energy wasn’t already affordable for them.”
Many of those families are just going through the harsh summer where they had to face high air conditioning bills.
Here is what we know about this epidemic: It has hit people who were already struggling with wages without spending a living.
– Carol Hardison
Congress paid some money for energy assistance programs for low-income families, but the directors of those programs are now seeing their purchasing power declining as fuel costs rise, Wolf said.
The biggest reason for the heat bills this winter is the recent rise in multi-year low prices of energy goods in 2020. Demand has grown faster than production as the coronavirus has shut down the economy again.
Natural gas in the United States, for example, has risen to its highest price since 2014 and is up about 90% from last year. Meanwhile, the wholesale price of heating oil has doubled in the last 12 months.
Another reason for the growth is how the global fuel market has evolved. Natural gas prices have risen more than 350 percent this year due to strong demand and limited supply in Europe. This is pushing some of the natural gas produced in the United States for shipping to other countries, which has also put upward pressure on domestic prices.
According to Barclays analyst Amarpreet Singh, the amount of natural gas in storage inventory is relatively low. This means a pillow less in the hot winter season.
Meanwhile, heating oil prices are closely linked to the price of crude oil, which has risen more than 60% this year. Homes affected by that growth are mainly in the Northeast, where the percentage of homes using heating oil has fallen from 27% to 18% over the past decade.
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