BUFFALO, N.Y. — High energy costs will translate into expensive winter utility bills, with the price of heating oil skyrocketing in Western New York and across the country.
The National Energy Assistance Directors Association predicts natural gas prices will increase 6% over last winter, electric up 9% and heating oil a staggering 43%. But that's nationally. Local costs are even higher.
NYSERDA's weekly retail report shows heating oil going for $6.03/gallon in Western New York, lower than the statewide average but up 67% compared to a year ago.
For families, that could mean thousands of dollars more to heat their homes this winter.
"A typical winter, you might use 800 gallons," said Tom Kloza, chief energy advisor for Gulf Oil. "At $6 and change, you're talking about a $5,000 bill to keep warm this winter."
Kloza said the problem goes beyond the price of crude oil. Heating oil and diesel are closely related refined products, and he said inventories are exceptionally tight.
"We've got the lowest inventories we've seen in my lifetime," Kloza said. "And I've been in this business for 50 years."
The impact is already being felt by heating oil customers across Western New York.
Michael Casciano, president of NOCO, said customers who don't have oil left over from last winter may be forced to make large purchases now, but high prices are making it harder for some people to completely top off their tanks.
"We're going to see more deliveries per household, because people aren't going to be able to fill up the whole tank just because of the price," Casciano said.
More than 17,000 homes across the eight counties of Western New York use heating oil as their primary heating source, according to the U.S. Census Bureau. The highest concentrations are in Orleans and Wyoming counties, both of which are in double digits.
Kloza said even if crude oil prices fall, that doesn't necessarily mean heating oil prices will quickly follow.
"It has less to do with the price of crude and it has more to do with tightness or even a shortage of refined products," he said.
That's because refineries have to balance production of heating oil and diesel with other fuels, including gasoline.
For homeowners trying to manage the higher costs, Casciano recommends taking steps now to reduce how much heat escapes from the home.
"Now's the time to seal your home, look at your windows and your doors," Casciano said.
Weather will also play a major role in how much homeowners ultimately spend.
Western New York is expected to experience the effects of a strong El Niño pattern this winter, which typically brings warmer-than-normal temperatures to the region.
But a warmer overall winter doesn't rule out periods of extreme cold.
Casciano said a prolonged cold snap, like we experienced last winter, combined with high heating oil prices, could put significant pressure on homeowners.
"If we have these two things both going in the same direction, where the price of home heating oil is higher than normal, and we end up getting a cold patch like we did last year, that's going to put a tremendous amount of pressure on the homeowner," he said.
Casciano also pointed out that higher fuel prices affect NOCO itself. The company's delivery trucks run on diesel, and drivers are making more stops as customers purchase smaller amounts of heating oil.
Kloza warned that kerosene prices are also extremely elevated this winter, in part because refineries produce it in a similar way to jet fuel.
"It's a frightening prospect," Kloza said of overall energy price trends.
