Fuel oil used to heat homes costs 68.5% more than this time last year
Fuel oil used to heat homes costs 68.5% more than this time last year
Though inflation is slowing a bit, it’s still high. One of the prices that’s jumped the most in the last year is fuel oil used to heat homes, which is up 68.5% year over year.
This huge spike in the price of fuel oil matters most to people in the Northeast.
“Thirty-five percent of homes in New England use fuel oil for heat,” said Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution.
It’s really the only region where a significant number of homes heat with oil, she added. “An important reason for that is that New England doesn’t have a lot of natural gas pipelines.”
So gas heat is less common. New England also has a lot of old houses.
“Nobody’s building new houses with oil heaters these days. And so this tends to hit people who live in older houses, who — on average — are less well off,” said Severin Borenstein at the University of California, Berkeley’s Haas School of Business.
This winter could be tough for them, he said. “Unfortunately, we’re going into this season with lower inventories than typical.”
That’s one of the reasons the price of fuel oil is up so much, said Hugh Daigle, a professor at the University of Texas at Austin’s petroleum and geosystems engineering department.
“A lot of this goes back to last year, when there were several refineries that were damaged by hurricanes, and then there were workforce shortages.”
Refinery capacity is still lagging, he said. And on top of that, there’s a lot more demand now from Europe, since it’s moving away from Russian oil.
“When you are competing with European consumers who really need these products, that really puts a squeeze on American consumers,” he said.
Let’s hope this winter is mild, Daigle added. “Looking down the road, we need to rethink the ways in which we heat our houses,” so that way, we’re not so affected by the price of oil.
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