Expect heating costs to increase, experts say

Natural-gas users will see an 18 percent rise.

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 with 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.”

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.