Heating Oil Prices are at Record Highs. Who Gets Hit the Hardest.

Dow Jones
9小時前

Inflation is squeezing households nationwide, but Northeasterners are facing a particularly chilling forecast. Heating oil prices are at record highs-and the cold and snow are still a ways off.

This winter's average heating oil bill will be $2,627, a 50% increase from last winter's $1,749, according to Mark Wolfe, executive director of the National Energy Assistance Directors Association, whose members administer heating-assistance programs.

The Northeast accounts for about 82% of the heating oil used in the U.S. Other regions rely more on natural gas and electricity.

In New York, the average price for a gallon of heating oil is $6.27, compared with $3.69 at this time last year. Maine, where more than half the homes use heating oil, set a record last week-$6.02.

In Vermont, where the price is comparable, a household uses about 700 gallons of fuel each winter, according to Matt Cota, of Vermont Fuel Dealers Association. If prices stay around $6 a gallon, that could force a homeowner to pay more than $4,000 for the winter.

"Furnaces and boilers will start to flip on in the next 30 days," said Cota, the association's director of government affairs. "That's when we're going to start to see more of a reaction."

A sense of anxiety is spreading throughout the region.

"The phones are literally ringing off the hook with customers who are concerned," said Michael Ferrante, president of the Massachusetts Energy Marketers Association.

Customers want to lock in price plans that could protect them from the spot market, but retailers don't have much to offer right now because of the oil market's volatility. It's hard for fuel companies to protect themselves against price swings, let alone offer customers price protection, too, Ferrante said.

Heating oil is basically diesel fuel, making it vulnerable to diesel price fluctuations worldwide. And right now, diesel is trading at record levels because the wars in Iran and Russia have put it in short supply.

Iran has blocked fuel shipments through the Strait of Hormuz, and Ukraine has destroyed several Russian refineries. The Trump administration has floated the idea of banning diesel exports, which could keep more at home.

The price spike is becoming a potent political issue in the U.S., especially in Maine.

Democrats are accusing Sen. Susan Collins, a Republican in a tough re-election race, of contributing to the price hikes because of her early votes against resolutions to stop the Iran war. Collins has since voted to curb the president's war powers.

"Sen. Collins has voted against the Iran War nine times," Phoebe Keller, a spokeswoman for Collins, told Barron's in an email. "To say she supports the war is completely inaccurate."

The senator has also advocated for more federal funds to help low-income residents pay for heating oil and to tap into an emergency stockpile of heating oil.

 

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