U.S. inflation to send heating bills through roof
CANADA & WORLD
NEW YORK — Get ready to pay sharply higher bills for heating this winter, along with seemingly everything else. With prices surging worldwide for heating oil, natural gas and other fuels, the U.S. government said Wednesday it expects households to see their heating bills jump as much as 54 per cent compared to last winter. The sharpest increases are likely for homes that use propane, which account for only five per cent of U.S. households, but others are also likely to see big increases. Homes that use natural gas, which make up nearly half of all U.S. households, may spend $746 (U.S.) this winter, 30 per cent more than a year ago. That could make this winter’s heating bills the highest for them since the winter of 2008-09. The second-most typical heating source for homes is electricity, making up 41 per cent of the country, and those households could see a more modest six per cent increase to $1,268. Homes using heating oil, which make up four per cent of the country, could see a 43 per cent increase — more than $500 — to $1,734. This winter is forecast to be slightly colder across the country than last year. That means people will likely be burning even more fuel to keep warm, on top of paying more for each bit of it. If the winter ends up being even colder than forecast, heating bills could be higher than estimated, and vice-versa. The forecast from the U.S. Energy Information Administration is the latest reminder of the higher inflation ripping across the global economy. Earlier Wednesday, the government released a separate report showing that prices were 5.4 per cent higher for U.S. consumers in September than a year ago. That’s the hottest inflation since 2008, as a reawakening economy and snarled supply chains push up prices for everything from cars to groceries. The higher prices hit almost all households, with pay raises for most workers so far failing to keep up with inflation. Average hourly earnings for workers were up 4.6 per cent last month from a year ago. But higher heating bills will hit low-income households particularly hard. The biggest reason for this winter’s higher heating bills is the recent surge in prices for energy commodities after they dropped to multi-year lows in 2020. Demand has simply been growing faster than production as the economy roars back to life following the shutdowns caused by the coronavirus. Natural gas in the United States, for example, has climbed to its highest price since 2014 and is up roughly 90 per cent over the last year. The wholesale price of heating oil, meanwhile, has more than doubled in the last 12 months.