As we approach the end of the year, from oil to natural gas, it appears a perfect storm is brewing for many Americans to experience an expensive winter. The U.S. Energy Information Administration released its short-term energy outlook Wednesday.
“We forecast that average U.S. household expenditures for all major home heating fuels will increase significantly this winter primarily because of higher expected fuel costs as well as more consumption of energy due to a colder winter,” the administration said in its outlook. “Average increases vary by fuel, region, and weather assumptions.”
The administration is expecting the following increases in the cost to heat your home this winter:
- 54 percent if you heat by propane.
- 43 percent if you heat by oil.
- 30 percent if you heat by natural gas.
- 6 percent if you heat by electricity.
This information is also published in the administration’s winter fuels outlook.
“We expect space heating demand to generally be higher this winter based on forecasts from the National Oceanic and Atmospheric Administration (NOAA) that U.S. average heating degree days will be 3% higher than last winter,” the administration said in its short term outlook.
A potential omen of an expensive winter can be seen with gas prices. This week’s national average is $3.27, which is the highest it’s been in seven years. On-highway diesel fuel prices were at $3.59, which is $1.19 high than it was at this point last year.
The increase in prices comes amid record levels of inflation. On Thursday, the Labor Department reported its producer price index rose 8.6 percent in the last year. That’s the largest year-to-year increase since wholesale prices were first calculated in 2010. It broke the previous record of 8.3 percent set the previous month.
That report came a day after the department reported consumer prices have risen 5.4 percent in the last year. This increase is the largest year-over-year rise in inflation since 2008.
The inflation is being blamed in part on supply chain bottlenecks on both coasts. Also on Wednesday, the White House announced it worked out a deal with the Port of Los Angeles to turn it into a 24-hour, seven-day-a-week operation.