High U.S. retail energy prices, many of which are already at multi-year highs, will result in much higher residential energy bills for Americans this winter, the Energy Information Administration (EIA) said in its Winter Fuels Outlook on Wednesday.
Consumers could spend 54% more than last winter, unless they heat with propane, which could result in bills that are 94% higher than last year.
The EIA assumes that the coming winter will be slightly colder than last year. This, combined with higher energy prices, means that households will spend more on energy this winter compared with the past several winters.
As demand for energy is picking up with the U.S. economy recovering from the pandemic, the energy bills for households that heat with natural gas, electricity, propane, and heating oil will surge this winter season, the EIA said.
Compared with last winter’s heating costs, EIA expects U.S. households will spend 54 percent more for propane, 43 percent more for heating oil, 30 percent more for natural gas, and 6 percent more for electric heating. If winter temperatures are colder than expected, U.S. households will spend even more on heating bills.
As per EIA estimates, the nearly half of U.S. households that heat primarily with natural gas will spend 30 percent more than they spent last winter on average. If the winter is 10 percent colder-than-average, the natural gas bill will jump by 50 percent. But even a 10-percent warmer-than-average winter will mean 22 percent more spending on natural gas for residential heating.
For the 5 percent of U.S. households that heat primarily with propane, the average spending will soar by 94 percent in a colder-than-expected winter, while the 4 percent of U.S. households that heat primarily with heating oil will spend 59 percent more in a colder winter, the EIA said.
In a colder winter, electricity heating bills will rise by 15 percent compared to last year’s bills, according to the administration. A total of 41 percent of U.S. households heat primarily with electricity.
“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,” said EIA Acting Administrator Steve Nalley.
Although the U.S. is unlikely to see skyrocketing natural gas prices of the magnitude seen in Europe and Asia, prices of the Henry Hub U.S. natural gas benchmark have more than doubled since the start of this year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More