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Which heating system will be cheaper next winter? Natural gas vs oil

This winter is expected to be colder across most of the nation and depending on what kind of system you use to heat your house that could mean a hefty bill.

Winter heating bills forecast to be costly

The winter heating season is approaching, considered to run from October through March. And if the Old Farmer’s Almanac prediction is correct it’s going to be a colder-than-normal one for much of the United States.

That means Americans will be using more energy to keep their homes warm when Jack Frost comes nipping. Depending on what kind of system you use to heat your house could mean a serious difference in your utility bills.

Which heating system will be cheaper next winter? Natural gas vs oil

The National Energy Assistance Directors Association (NEADA) released its winter heating price outlook for 2023-2024 covering estimated expenditures for various sources used to heat homes. The trend over the past four years has been rising prices across all sources with the weighted average going from $847 in 2019-2020 to $1,106 estimated for this winter. Three of the four sources are forecast to be costlier in the winter of 2023-2024.

The winners this year will be those who use natural gas with the expected cost to drop 7.8 percent. The forecast predicts a household expenditure of $726 compared to $787 last winter. Just under half of US households use natural gas for heating.

The big losers this year will be those who use heating oil with the estimated household expenditure forecast to soar 8.7 percent to $2,275. That’s a far cry from the $1,352 for the winter of 2019-2020. Prices have surged due to tightening of supply in petroleum markets as Russia and Saudi Arabia cut back on production.

Only a small percentage of homes are heated with oil, just over four percent, mainly in the Northeast. There is a silver lining though, with the Almanac predicting a milder-than-normal winter but don’t rule out a polar vortex visiting.

The other two sources, electricity and propane, will see smaller increases. Households heated with electricity will see their bill to keep warm rise on average $17 climbing to $1,374. Meanwhile, propane fired furnaces will burn an additional $62 this winter pushing the average bill up to $1,538.

Lower-income households at risk of falling behind on energy bills

American families have been getting hit from both sides of the temperature gradient with rising temperatures in the summer increasing demand for cooling. Coupled with the continued high cost of heating, this will put millions of lower income families at risk of falling behind on their energy bills according to Mark Wolfe, the Executive Director of NEADA.

For that reason, NEADA sent a letter to Congressional Leadership pleading with them to maintain the current $6 billion funding level of Low Income Home Energy Assistance Program (LIHEAP). The program helps to “reduce the risk of health and safety problems that arise from unsafe heating and cooling practices.”

Last year Congress budgeted $8.4 billion for the program. Both the House and Senate have proposed slashing the budget for the program by an additional $2 billion for next year. If approved, that means states would have to cut assistance to one million families just as many states have reported that applications are up by between 10 and 20 percent over the past year.