New England faces record-high heating oil costs this winter

Surging gasoline and fuel oil prices drove up inflation in September, likely foreshadowing record-high heating oil costs for homeowners and businesses in New England this winter season.

Fuel oil soared 15.3% in September from the previous month and 74.2% for the year, and gasoline prices jumped 9.1% from August and 34.2% Y/Y, according to the U.S. Bureau of Labor Statistics in its update to the consumer price index released this week.

Fuel oil costs are climbing across the U.S. due to global oil market disruptions caused mostly by the decline in oil supply from the Middle East and the loss of refining capacity worldwide.

In Maine, where at least half of residents use fuel oil to keep their homes warm, heating oil prices have increased ~80% from last year to just below $6/gal, the Washington Examiner reported.

An oil-heated home typically uses 500-700 gallons of oil each year, which means families will pay ~$4K more to keep their homes warm this winter.

The high prices will remain throughout the winter, which could create dangerous conditions for families and cause some to fall behind in paying their bills, Van Nostrand, former chair of the Massachusetts Department of Public Utilities, told the Examiner.

Alternative heating resources such as heat pumps could provide a lower-cost path in the long run, save more than $1,000 annually on heating bills depending on electricity rates, but whole-home heating systems in cold climates cost $15K-$25K to install, Van Nostrand estimated.