Home heating costs are expected to rise across the United States this winter, with households in the Northeast facing some of the sharpest increases because of their heavy reliance on heating oil. Nearly 5 million U.S. households used heating oil as their primary heat source during the 2023-2024 winter, and about 82% of those households were located in the Northeast.

Heating oil prices are closely tied to diesel because the two fuels are chemically similar. William O'Neil, a principal research analyst at S&P Global, said the relationship means higher diesel prices generally translate into higher heating oil costs. S&P Global has also reported that U.S. diesel inventories remain unusually tight heading into the fall and winter heating season.

The National Energy Assistance Directors Association projects that households using heating oil will spend an average of about $2,297 this winter, up from roughly $1,749 last winter, a 31% increase. Across all heating fuels, NEADA estimates the average household will spend about $1,030 this winter, an 8.7% increase from last year.

Other energy sources are also expected to become more expensive. NEADA projects natural gas costs to increase 5.8%, electricity costs to rise 9% and propane costs to climb 8.7%. The group has warned that higher heating expenses could put additional pressure on lower- and middle-income households that already have limited room in their budgets.

The higher costs are being driven in part by disruptions to global oil and refined-fuel supplies. The Energy Information Administration said low U.S. distillate inventories could contribute to higher diesel prices and residential heating oil costs in the Northeast, particularly as refinery maintenance reduces production and seasonal demand increases.

Supply problems have also been compounded by disruptions overseas. S&P Global reported that Ukrainian attacks have reduced Russian refining capacity while disruptions around the Strait of Hormuz have constrained Middle Eastern refined-product exports. Those pressures are hitting the market just as agricultural and winter heating demand are increasing.

For households that depend on heating oil, the increases could begin affecting budgets before winter fully arrives. NEADA Executive Director Mark Wolfe has called for additional funding for the Low Income Home Energy Assistance Program, arguing that rising energy costs could leave more families struggling to keep up with utility bills.