Capital Region

Home heating oil prices spike, higher costs projected throughout winter

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Average home heating oil prices in the Capital Region are up more than a dollar per gallon from this time last year, with costs predicted to remain high throughout the upcoming winter heating season. Prices for the week of Oct. 25 reached a level not seen in the area in seven years, though the region’s prices still remain among the lowest in the state.

Home heating oil was priced at $3.36 per gallon for the week of Oct. 25, an increase of $1.23 per gallon — or 57.7% higher — from the same time in 2020, according to numbers published by the New York State Energy Resource and Development Agency (NYSERDA).

Home heating oil prices on Tuesday were listed at $3.19 per gallon, according to the website of Buhrmaster Energy Group, one of the region’s largest providers.

In the first week of October, home heating oil prices in the Capital Region exceeded $3 for the first time since Jan. 13, 2020. According to the NYSERDA figures, the last time heating oil prices in the area were at or higher than the current level was the week of Dec. 1, 2014, when the average price was fractionally less than $3.42 per gallon.

While prices are up across the board, they remain lower in the Capital Region than almost anywhere in New York State. According to NYSERDA’s figures, the $3.36 price for the week of Oct. 25 was second-lowest in the state, barely higher than the $3.35 per gallon average in Central New York. Statewide, the average price of heating oil last week was $3.59 per gallon.

The price increase is a confluence of multiple factors, according to Kris DeLair, executive director of the Empire State Energy Association, a trade association representing more than 200 energy marketers across the state.

“Fuel demand has increased faster than production,” DeLair said. “There’s limited investment in capital expenditures, you’ve got consumption concentrated in the winter, there’s increased cost in shipping and labor costs, truck driver shortages, low fuel inventories. . . . You put all of those things together.”

Also factored in is the current price of crude oil at $80 per barrel, more than double the price from this time last year.

The trends are likely to continue throughout the winter. According to slides presented during NYSERDA’s New York State Winter Fuels Outlook Meeting held last Thursday, with retail prices for energy “at or near multiyear highs” in the U.S., the agency “projects higher average household heating fuel expenditures for heating oil, natural gas, propane and electricity in New York compared to last year.”

Those projections come despite the National Oceanic and Atmospheric Administration forecasting a similar number of heating-degree days from October through April as there were during the 2020-2021 winter. 

Overall, fuel prices nationally are projected to be 33.1% higher for heating oil, 42.2% higher for propane and 14.4% higher for natural gas than last winter, with fuel expenditures projected at 43.3% higher for heating oil, 47.0% higher for propane and 18.3% higher for natural gas, according to a slide from the NYSERDA presentation, citing the U.S. Energy Information’s Short-Term Energy Outlook.

Last month, National Grid announced that its typical residential customer’s natural gas bill during the heating season will be about 31% higher than it was a year ago, citing increased demand for natural gas.

According to NYSERDA’s historical database, the Capital Region and Central New York, along with the North Country, have the lowest average heating oil prices in the state, separated normally by a few cents per gallon. Prices are traditionally highest in New York City and Long Island.

“You have a higher cost of living in some areas,” DeLair said. “New York City will typically have higher fuel prices.”

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