Consumer Price Index: Will Inflation Impact Your Winter Heating Bill?

Young girl sitting in front of the fireplace and holding cup of tea in hand on legs and warming.
Emilija Randjelovic / Getty Images/iStockphoto

Winter is coming — and with it may come some of the coldest temperatures we’ve had in years. According to the Farmer’s Almanac, January may bring record-breaking temps of 40 below in some places in the U.S. And that means many will be turning up the thermometers … and their heating bills.

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With the new data in the August Consumer Price Index, released by the U.S. Bureau of Labor Statistics on Tuesday, the cost of utility gas service is up again. After dropping 3.6% in July, the August CPI shows that the price of piped gas is now up 3.5%. With increases nearly every month this year (including huge jumps of 8% or more in May and June), it equates to a total increase of 33% in the cost of this utility over this time last year.

To put it into context, that means an average heating bill that cost $150 last December will cost $199.50 right now — and we’re not even in the thick of winter yet. There are a few more months of CPI data to go before the season officially kicks off December 21 — and if trends stay steady, we could see an additional 10% or more increase.

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Piped gas is not the only natural resource utility going up, either. Electricity is seeing record increases as well. That price index rose 1.5% in August, the fourth consecutive month of price jumps this year and bringing a total increase of 15.8% over this time last year. That’s the biggest increase for this index since 1981. Overall, the energy index rose 23.8% over the last 12 months.

Though the overall CPI for August for all categories remained nearly unchanged from last month (with a nominal 0.1% increase), this is largely due to the price index for gasoline dropping significantly, by more than 10%. However, most other categories did see increases, showing that inflation is still very much present in America. In total, year-over-year, consumer prices are up 8.3% since 2021. The ongoing rises may also spur the Federal Reserve to raise interest rates as much as three-quarters of a point as another measure to try to curb inflation at their September meeting.

In the meantime, there are ways you can prepare for the colder months ahead. As GOBankingRates previously reported, there are a number of ways to save on energy bills including performing regular maintenance on appliances to ensure they are working at their peak, upgrading to energy-efficient appliances and stopping air leaks. When it comes to natural gas, you’ll also want to use energy-efficient thermostat settings, drop the temp of your hot water heater and replace/insulate old windows to help cut down on usage.

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It’s a great time to make upgrades too, as the newly passed Inflation Reduction Act will allow families to take advantage of up to $14,000 in direct rebates for switching to clean energy appliances, as noted by the White House.

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About the Author

Selena Fragassi joined GOBankingRates.com in 2022, adding to her 15 years in journalism with bylines in Spin, Paste, Nylon, Popmatters, The A.V. Club, Loudwire, Chicago Sun-Times, Chicago Tribune, Chicago Magazine and others. She currently resides in Chicago with her rescue pets and is working on a debut historical fiction novel about WWII. She holds a degree in fiction writing from Columbia College Chicago.
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