WASHINGTON — Homeowners who heat their houses with heating oil will see their bills jump more than 37% this winter from a year ago, the government said Tuesday in a report that also projected increased costs for all other heating sources.
The average heating oil tab will total $1,309 for the October-to-March period, the Energy Department’s Energy Information Administration said in its monthly report. Previously, the EIA estimated heating oil bills would total $1,223, a 28% jump from a year ago. Since the October report, oil prices rose higher than expected, leading to the increased estimate.
About 8% of U.S. homes are heated with heating oil; most of those houses are in the Northeast.
Heating oil users are facing the biggest jump in winter heating bills because of low supplies, expected elevated demand and the high cost of crude oil, which is used to make heating oil.
After seeing her heating oil bills soar last year for her Silver Spring, Md., home, Soo Han, 34, looked into converting to natural gas or another source. But that was too expensive. Now she’s trying to conserve. So far, she has only turned on her heat upstairs, waiting as long as possible to turn on the heat downstairs, where her kitchen, dining room and living room are.
“I’ll probably just cook, then go on upstairs,” Han, a government worker, says.
Users of other heating sources are also expected to write bigger checks to keep their homes warm this winter. Consumers with natural gas, which is used to heat more than half of U.S. homes, are expected to pay 15% more this winter; electricity users are expected to see a 5% rise; and propane users are expected to pay 26% more. A warmer-than-expected winter seems to be the only chance to escape higher bills.
“The way out of it is for a really warm spell to set in,” EIA economist Dave Costello says.
Other details from the report:
•Oil. Oil prices will remain in the mid to high $40s through 2005 as rising demand continues to strain tight resources, the EIA said. Tuesday, oil prices fell $1.72 to $47.37, the lowest in seven weeks. Prices fell as supply fears dissipated, but some analysts were skeptical the decline would continue. The drop did not erase the fact that companies had already bought oil, natural gas, heating oil and other fuels for the winter at high prices before prices began to fall, meaning retail costs would likely stay elevated.
•Gas. Based on high oil prices, gasoline will average $1.98 a gallon during the fourth quarter, up 20 cents from the EIA’s prediction just a month ago.
“Relatively high current and projected crude oil costs suggest that large reductions in average gasoline prices are unlikely anytime soon,” the EIA said in the report. “In fact, gasoline prices are likely to gain 10 to 15 cents per gallon by the spring of 2005.”
