Heating oil costs roughly $5.91 a gallon nationally, up 59% from a year earlier, according to the U.S. Energy Information Administration. Maine households that depend on the fuel may feel the increase acutely. A release from the Northeast Home Heating Oil Reserve and calls for extra heating aid have followed.
The national average price of heating oil is roughly $5.91 a gallon, up about $2.19, or 59%, from a year earlier, according to the EIA. In Maine, the average is roughly $5.83, up about $2.49, or about 75%.
Maine may feel the increase acutely, as about 50% of homes there use heating oil. Jason Parent, CEO of AVEC Community Action, a nonprofit in Presque Isle, Maine, says the jump "is crushing folks".
Tight refined fuel markets push prices up
The spike comes amid a tight global market for refined fuels. According to recent research from the Federal Reserve Bank of Kansas City, supply shocks tied to the Iran war and the Russia-Ukraine war, low inventories and limited refining capacity have added upward pressure on fuel prices.
The price surge also follows years of high overall inflation that has already squeezed household budgets, Parent said. The EIA forecast in October that the average household using heating oil will spend $2,115 from November through March, about 21% more than last year.
Assistance buys fewer gallons
Parent said the average benefit through the Home Energy Assistance Program is about $750 per household this season, up from roughly $550 a year ago. However, he said the larger benefit buys fewer gallons because of the increase in price.
AVEC began taking calls for its emergency program on Nov. 2. In the first hour alone, there were 150 voicemail messages on the emergency fuel line, Parent said.
Reserve release and funding requests
The Trump administration said it would release 300,000 barrels of heating oil from the Northeast Home Heating Oil Reserve, according to a Nov. 4 Energy Department release. Jonathan Rubin of the University of Maine said whether the release lowers prices depends at least partly on how it gets doled out.
Meanwhile, dozens of House lawmakers, mostly Democrats, signed an Oct. 14 letter seeking an additional $3 billion in emergency supplemental funding for the Low Income Home Energy Assistance Program. Whether Congress will consider the request is uncertain.
Source: CNBC
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