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