Heating Costs Expected to Rise Significantly This Winter

<p>Americans may face higher heating costs this winter, particularly for those using oil, according to a new analysis reviewed by Axios. The report highlights the impact of volatile energy markets and ongoing geopolitical tensions, including the conflict in Iran, on heating affordability.</p><p><strong>Why it matters:</strong> Rising heating bills are affecting household budgets ahead of winter, with notable differences based on fuel type.</p><hr /><p><strong>By the numbers: </strong>Families using oil for heating could see costs increase by approximately 50% compared to last winter, as per estimates from the National Energy Assistance Directors Association (NEADA). This is an increase from a previous projection of 31.3% made in mid-September.</p><ul><li>The average cost of heating a home with oil is anticipated to rise by about $878, totaling over $2,600 this winter.</li><li>In contrast, the Energy Information Administration (EIA) projects a 4% increase in electricity bills nationally, while natural gas bills are expected to decrease by 9% and propane costs by 3%. The EIA forecasts a smaller increase in heating oil costs than NEADA, estimating a 21% rise in household expenditures.</li></ul><p><strong>Northeastern households will </strong>experience the most significant impact, as approximately 82% of home heating oil is consumed in this region, where some states lack extensive natural gas pipelines, according to NEADA data.</p><ul><li>Only 3% of U.S. households primarily use oil for heating, compared to about 45% using natural gas and 43% using electricity, NEADA reports.</li></ul><p><strong>The big picture: </strong>Heating oil prices are increasing due to challenges in global oil markets stemming from conflicts in Iran and Ukraine, coupled with a decline in refinery activity.</p><ul><li>Mark Wolfe, executive director of NEADA, stated, "Those trends really reflect the worst-case scenario of this war, and they are going to feel it this winter, and it's unfortunate."</li></ul><p><strong>What they're saying: </strong>Due to rising costs, some families may reduce spending on food or medicine, resort to payday loans, or lower their heating to unsafe levels to manage their bills, according to Wolfe.</p><ul><li>Wolfe noted, "With low-income families, sometimes states will move money around to help them, but they'll go without."</li></ul><p><strong>Between the lines: </strong>While states can allocate more funds for heating assistance, they have limited options to protect heating-oil customers compared to those using regulated gas and electric utilities, Wolfe explained.</p><ul><li>States can mandate utilities to provide discounts, affordability programs, or winter shutoff protections, but these typically do not extend to independent heating-oil dealers.</li></ul><p><strong>Zoom in: </strong>Massachusetts Governor Maura Healey declared a State of Energy Emergency on Monday due to rising winter energy costs, unlocking nearly $150 million in relief and expanding assistance to middle-class households that heat with oil.</p><ul><li>Rhode Island has also declared an energy affordability emergency, directing $28 million in reserves toward winter electric-bill relief, while Maine Governor Janet Mills announced $40 million in automatic electricity discounts for low-income residents.</li></ul><p><strong>Zoom out: </strong>The energy affordability crisis is exacerbated by the previous administration's attempts to dismantle the Low Income Home Energy Assistance Program (LIHEAP).</p><ul><li>The administration terminated LIHEAP's federal staff at the Department of Health and Human Services in April 2025 and proposed eliminating funding for the program.</li><li>Although LIHEAP continues to operate, state administrators are doing so without dedicated federal staff.</li><li>The White House referred Axios to HHS, which stated it "will carry out its responsibilities for funding Congress has made available" and that "HHS has the staff and capacity to distribute these funds in a timely manner." </li></ul><p><strong>The bottom line: </strong>As winter approaches, Americans should prepare for both colder temperatures and rising heating costs.</p>