Surging energy prices coupled with forecast of a colder temperatures mean consumers can expect to pay hundreds of dollars more to keep their homes warm this winter.
How much more it will cost is difficult to say. That will depend on the type of fuel used to heat the home, commodity prices and temperatures.
But the Energy Information Administration’s annual winter energy outlook released this week says the cost of heating with natural gas, the most common source of fuel in Ohio, is expected to go up by 30% this winter compared with last winter.
The cost of heating with propane is expected to go up 54%, and a 43% spike is forecast for heating oil. Electricity is expected to see the smallest increase, 6%.
Why natural gas, propane and heating oil prices are set to soar
Surging global demand for natural gas, propane and other energy sources is to blame for much of the increase as global economies come out of the pandemic. Natural gas prices are at their highest levels since 2014.
“The higher global and domestic energy prices that are resulting from economies beginning to grow again are going to translate into larger household bills for energy this winter,” EIA Acting Administrator Steve Nalley said in a statement.
A typical natural gas customer in the Midwest is expected to pay $818 this winter, up from $551 last winter, according to the forecast. About two-thirds of Ohio homes are heated by natural gas.
The cost of using electricity to heat a home in the Midwest is expected to go up 4.9% to $1,346. Electricity heats about a quarter of Ohio homes.
The biggest jump will be in propane, used to heat nearly 5% of Ohio homes.
That cost is expected to be $1,805, up about two-thirds from the year before.
The cost of heating with fuel oil, used in 2% of Ohio homes, will cost $1,734 nationwide this year.
Spot natural gas prices are expected to average $5.80 per thousand cubic feet this fall, 45% higher than the estimate in August, according to EIA. That’s just the price of the fuel and doesn’t include the cost of transporting the fuel to the customer’s home.
The government said inventory builds of natural gas through the summer were below prior years, and higher prices in the U.S. have coincided with sharp increases in international prices for natural gas.
Natural gas prices in Europe and Asia are at record levels, and those prices have contributed to strong demand for U.S. exports of gas.
“Increased natural gas demand in Europe and Asia is supporting record U.S. (liquefied natural gas) exports to those regions,” Nalley said. “Low natural gas inventories in the United States and Europe make our price forecasts very uncertain, because a severe cold snap could lead to significant price effects.”