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U.S. households can expect to spend more money on heating their homes this winter compared to last year, federal officials said.
A report released on Wednesday by the Energy Information Administration predicts that home heating costs will rise because fuel prices rise and demand increased over the previous winter.
Many energy prices fell dramatically last winter due to a sharp drop in demand caused by the COVID-19 pandemic. But the agency said prices have since rebounded, in part due to the economic recovery, and in some cases, to multi-year highs.
How much are energy prices increasing?
All residential consumers should expect to pay more for heat, but officials say the type of fuel you use will determine how much extra you have to shell out.
Nearly half of American households heat their homes with natural gas, and they will pay 30% more on average this winter, while homes heated with electricity will pay 6% more, according to the Winter Fuels Outlook. It will cost an average of $ 746 to heat homes with natural gas this winter, while those who use electric heat can expect to spend around $ 1,268 on their electric bills this season, according to the report.
Far fewer households are keeping their homes warm with fuel oil and propane, but their costs are expected to increase even more. Fuel oil users will pay an average of 43% more than last winter, while propane users will pay 54% more.
The EIA said those estimates were based on a weather forecast from the National Oceanic and Atmospheric Administration, which predicts a colder winter. But the report notes that even though this winter is a little warmer than expected, all residential consumers using any of these four fuels will still pay more for heat.
Energy producers blame the Biden administration
In a statement, Anne Bradbury, CEO of the American Exploration & Production Council, lambasted the Biden administration for pursuing policies she said made it harder for U.S. producers to supply oil and natural gas.
“To ensure that we have a stable and affordable supply of energy here in the United States, the Biden administration should support domestic production of oil and natural gas, ensure continued production on federal lands, work with the industry on sensible and smart methane regulations, and stop calling for increased taxes on the US oil and gas industry, ”Bradbury said.
But the Energy Information Administration said the main reason for the surge in energy prices is that demand for fuel has risen from recent lows faster than producers have increased supply.
Rising energy prices are just the latest example of steadily growing inflation as the global economy reboots after the first year and a half of the pandemic. On Wednesday, the Labor Department announced that consumer prices had risen 5.4% in the past 12 months, matching the highest level of inflation seen in the United States in more than a decade.