Winter Heating Bills Will Split by Fuel as Heating Oil Jumps and Natural Gas Eases
The U.S. Energy Information Administration said in its winter fuels outlook, released Oct. 6, that heating bills from November through March will split sharply depending on the fuel a household uses.
Households that heat with natural gas are expected to pay an average of $640, 9 percent less than last winter.
Households heating with propane are projected to pay an average of $1,246, down 3 percent, while those heating with electricity are expected to pay an average of $1,196, up 4 percent. Households using natural gas and propane account for about half of the total, and more than 40 percent use electricity as their main heating fuel.
The heaviest burden falls on households that heat with oil. Their average spending is expected to reach $2,115, up 21 percent from last winter.
Heating oil households make up only about 3 percent of the total, but most are concentrated in the Northeast. Heating oil boilers remain common across the Northeast, including Pennsylvania.
Price differences drove the spending gap. The EIA expects heating oil prices to average $5.26 a gallon this winter, 34 percent higher than last winter.
Heating oil belongs to the same distillate family as diesel. As global refining activity has declined, distillate production has fallen, and East Coast inventories in September stood 32 percent below the five-year average. The EIA expects inventories to remain 20 percent to 30 percent below average throughout the winter.
Natural gas moved in the opposite direction. Inventories built up ahead of winter are 2 percent above the five-year average and production has risen, pushing prices down. EIA Administrator Tristan Abbey said relatively high natural gas inventories serve as a buffer for heating demand heading into the winter season, while households using heating oil face higher prices because of a tight distillate market.
Weather assumptions also differ by region. National average temperatures were assumed to be similar to last winter, but the Northeast, which endured a cold winter last year, is expected to be warmer, while the West, which had an unusually warm winter, is forecast to be much colder. The Midwest and the South are expected to be similar to last winter.
The strong El Niño identified by the National Oceanic and Atmospheric Administration remains a variable. The EIA said actual temperatures could deviate significantly from the outlook because of El Niño.
In the Northeast, warmer weather will cut consumption and take some of the edge off price increases. Northeast heating oil consumption is expected to fall 9 percent, propane spending to drop 15 percent to an average of $1,687, and electricity spending to decline 3 percent. In the West, colder weather is expected to lift natural gas spending 7 percent and electricity spending 9 percent.
The rise in heating costs is tied to this fall’s energy price trend. According to AAA, the monthly average price of gasoline in September was $4.33 a gallon, surpassing the September record of $3.83 set in 2023. The EIA projects Brent crude prices will hold at an average of about $105 a barrel in the fourth quarter.
Actual bills will be decided by the weather. In the colder-winter case the EIA presented, heating oil spending could climb to $2,332. A home’s insulation and the efficiency of its heating equipment also make spending differ from household to household.
