Consumer Price Index: How Much Could September’s Inflation Impact Your Winter Heating Bill?

Commodity concept, 3D illustration.
Torsten Asmus / Getty Images/iStockphoto

If you’re worried about high home heating bills as winter approaches, your mind won’t be eased by the September inflation report. Although price increases for electricity and natural gas eased somewhat for the month, they are still moving higher. Meanwhile, other data point to one of the most expensive winters for heating bills in recent memory.

CPI: September’s Consumer Price Index Shows Inflation Higher Than Expected After Fed Rate Hikes
Social Security: 2023 COLA to Rise 8.7% for its Biggest Gain in Four Decades

The federal government’s Consumer Price Index (CPI) for September 2022, released Thursday, showed monthly increases for electricity and natural gas prices and a decline for fuel oil costs. However, all three have risen in double-digits over the past 12 months. The overall inflation rate in September climbed 8.2% over the past year.

The electricity index for September rose 0.4% on a month-over-month basis, the Bureau of Labor Statistics reported. That was actually the smallest gain since at least April 2022. On the downside, the index is up 15.5% on an annual basis.

Make Your Money Work for You

The natural gas index rose 2.9% on a monthly basis in September, down from a 3.5% gain in August. Year-over-year, the natural gas index has risen 33.1%.

The September index for fuel oil fell 2.7% from the previous month, smaller than the 5.9% dip monthly recorded in August. Year-over-year, however, the fuel oil index is up a staggering 58.1%.

Those numbers will not bring much cheer to inflation-weary consumers who had hoped that heating costs might go down this year amid a recent decline in oil and gas prices. That’s not likely to happen.

In fact, home heating costs for 2022-23 are expected to reach their highest level in more than 10 years, according to a recent report from the National Energy Assistance Directors Association (NEADA). It projects that U.S. households will pay 17.2% more on average for home heating this winter vs. last winter.

According to the NEADA, the average cost of home heating this winter is estimated to increase to $1,202 from $1,025 last year. This would mark the second straight year of major price increases. Much of the problem can be traced to a shortage of fuel supplies due to the Russia-Ukraine war, Gary Cunningham, director of market research at energy consultancy Tradition Energy, told NBC News.

Make Your Money Work for You

“There’s now an imbalance between our supply and demand,” Cunningham said. “All summer when we should have been putting gas in storage, we weren’t storing it away.”

Take Our Poll: Are You Struggling To Keep Up With Your Utility Bills?

Here are the NEADA’s estimated average bills in the U.S. for the 2022-23 winter and how they compare to last year:

  • All fuels: $1,202 in 2022-23 vs. $1,025 in 2021-2022
  • Natural gas: $952 in 2022-23 vs. $709 in 2021-22
  • Electricity: $1,328 in 2022-23 vs $1,242 in 2021-22
  • Heating oil: $2,115 in 2022-23 vs $1,876 in 2021-22
  • Propane: $1,828 in 2022-23 vs $1,587 in 2021-22

As NBC News reported, some utilities have already notified customers to prepare for higher heating bills. On Sept. 9, New York utility Con Edison forecasted that a typical customer’s electric bill would climb 22% to $116 a month this winter, while the average residential natural gas heating bill will increase 32% to $460 a month.

More From GOBankingRates

Share This Article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button
Make Your Money Work for You

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More

BEFORE YOU GO

See Today's Best
Banking Offers

1pximage