Save Up!: Higher Heating Costs Predicted - Cleveland 19 News Cleveland, OH

Save Up!: Higher Heating Costs Predicted

WASHINGTON (AP) - Although global oil prices have plummeted, the cost of heating your home this winter will be a lot more expensive, especially for households that depend on fuel oil, the Energy Department predicted Tuesday.

Households that use fuel oil can expect to spend an average of $2,388 - or $449 more than last year - for the October-April heating season. Users of natural gas will pay less than half that, $1,010 on average, still $155 more than last year.

The department's Energy Information Administration emphasized that the cost figures should be viewed as "a broad guide" comparing this year's expected heating costs to last winter and said actual expenses can vary depending on region, local weather and the energy efficiency of individual homes.

But across the board, whether one uses heating oil, natural gas, propane or electricity, costs will be higher, said the agency.

Users of electricity to heat homes will see the smallest increase, about 10 percent on average, followed by propane, 11 percent; natural gas, which is used in more than half of the nation's homes, 18 percent; and heating oil, used widely in the Northeast, 23 percent.

That's not good news for a country where people have been reeling from a summer of record $4-a-gallon gasoline, a booming credit crisis and a struggling economy.

Energy experts say some people have yet to pay last winter's heating bills or the summer's air conditioning costs. A recent Associated Press survey found that utility shutoffs because of unpaid bills have been running 17 percent to 22 percent higher than last year in some parts of the country.

The Energy Department said it expects the price of fuel oil will average $3.90 a gallon, 60 cents more than last winter.

While the cost of crude oil has declined from a high of $147 a barrel in July to just under $88 a barrel for delivery in November, the department said "oil markets are expected to remain relatively tight because of sluggish production growth." Barring a worse than expected global economic decline, prices are likely to edge back up to about $112 a barrel, the agency said.

Partly because of refinery shutdowns caused by the two recent Gulf coast hurricanes, distillate inventories - fuel oil and diesel - are expected to be lower going into the heating season than last year, said the agency. Fuel oil is used by about 7 percent of the nation's households.

Natural gas supplies will be plentiful this winter, with storage in November expected to be well above the five-year average, the gas supply industry said earlier this week. And wholesale gas prices have dropped to nearly where they were a year ago after soaring this summer.

Still, the retail cost of natural gas for heating is expected to be 18 percent higher this winter.

"Much of the natural gas utilities will deliver to households this year was purchased when prices were at or near these historic highs," said Chris McGill of the American Gas Association, which represents 202 local natural gas utilities across the country. That higher price will, for the most part, be passed on.

Meanwhile, people are using much less oil this year because of high prices at the gasoline pumps and the weakening economy, the Energy Department said.

Total U.S. petroleum consumption this year is expected to average 19.8 million barrels a day, or 830,000 barrels fewer than in 2007, followed by a further 100,000-barrel-a-day decline expected in 2009, according to the EIA report.

On the other hand, the agency said, domestic oil production this year will drop below an average of 5 million barrels a day for the first time since 1946 because of declining fields and the disruptions caused in the Gulf of Mexico by Hurricanes Ike and Gustav.

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