Heating Oil Prices Will Likely Cause Economic Hardships in the Oil-Dependent U.S. Northeast: Heating Assistance is Up and Has Been Expedited After Bipartisan Push

      Many of us have long argued that the U.S. Northeast was too dependent on heating oil. Compared to natural gas and LP Gas, heating oil is more expensive, much worse for air quality, and has higher carbon emissions. Prices for the petroleum distillate fuels are likely to remain high into the winter as disruptions in the Middle East and Russia strain global refined products markets. Petroleum distillates are refined products that are produced from crude oil delivered to refineries. It takes time for such products to be made available to buyers. With functional refinery capacity way down in Russia, a major oil products exporter, due to Ukrainian attacks, and with deliveries of refined products limited in the Middle East, another major exporter, it is unlikely that supply will rise and prices will lower in time for winter.   

     People facing a potential doubling of their winter fuel bills are understandably concerned, even if they should have been aware of the possibility. They will likely pay far more than double what a natural gas user pays. They would be better off installing a heat pump or an LP gas tank, lines, and appliances, or getting a natural gas hookup. I bought a house in the late 90s that had a fireplace, a wood burner in the basement, and an oil furnace. We installed a propane/LPG system, including outdoor and indoor piping, converted the stove to LPG, and installed unvented LPG heaters. It was more expensive than hooking up to natural gas, but there were no gas lines available for hookup. We sold the oil furnace.

     As the article in The Cool Down notes, people in Eastern Pennsylvania are facing a near doubling of fuel oil prices from $3 to $5.50 per gallon. This is on top of rising electricity and food prices. One person noted:

"The spike in utilities and heating oil and gas is outrageous, along with the food prices. It's just unsustainable for people. People are going to have to choose between eating and heating their home."

     As a result, people are weatherizing more, and more people are enrolling for government heating cost assistance.

     The price in Maine was $5.77/gal. prompting GOP Senator Susan Collins to lead a bipartisan effort to expedite the release of federal heating assistance. Maine has over 300,000 heating oil customers. The Low-Income Home Energy Assistance Program, or LIHEAP, provides for many seniors and low-income residents around the country. According to The Maine Wire:

“In April, Collins announced that HHS had released another $421.5 million nationally in fiscal year 2026 LIHEAP funding after Collins, Reed and Murkowski led another bipartisan request for the remaining money to be distributed.”

“LIHEAP provides vital relief to thousands of Mainers, helping them avoid the constant worry of choosing between heating their homes and covering other basic necessities,” Collins said following that release.”

     The Maine Wire article also points out that heating assistance dollars are not going as far if they don’t adjust to pricing. The National Energy Assistance Directors Association (NEADA) is calling for a funding increase for LIHEAP.

     In New York, heating oil prices have reached $6.14/gal, up from $3.70 a year earlier.

“The National Energy Assistance Directors Association projected this week that U.S. households relying on heating oil will pay 31.3% more to stay warm this winter, with average seasonal bills reaching approximately $2,300 — a direct result of surging crude oil prices driven by the war in Iran.”

“NEADA is urging Congress to raise funding for the Low Income Home Energy Assistance Program, known as LIHEAP, from $4 billion to $7 billion. Roughly one in six American households has fallen behind on utility payments, and the total amount owed to energy providers has climbed toward $23 billion, NEADA said.

     They also note that virtually all hydrocarbon fuels are facing price increases this winter, including a projected 8.7% increase for propane, which is produced in the U.S. and thus insulated from the Iran and Ukraine wars.

         Fuel oil is both produced domestically by U.S. refineries and is also imported. Like propane, it is largely produced domestically. However, since the international crude oil price has risen much more than the U.S. natural gas price, propane, which is a natural gas derivative (mostly), has not risen in cost as much as fuel oil distillate. Heating oil is often imported in the winter months to supplement stocks. However, if the El Niño weather pattern proves true, it may not be necessary to import any or much fuel oil.

 

References:

 

Pennsylvania homeowners fear ‘eating or heating’ as oil climbs from $3 to $5.50. Aaron Goldstein. The Cool Down, September 21, 2026. Pennsylvania homeowners fear 'eating or heating' as oil climbs from under $3 to $5.50

Heating oil costs rising 31% this winter due to Iran war. Cris Tolomia. Quartz. September 18, 2026. Heating oil costs rising 31% this winter due to Iran war

Maine Heating Oil Hits $5.77 a Gallon as Collins Pushes for Early Release of Federal Heating Aid. Jon Fetherston. The Maine Wire. September 20, 2026. Maine Heating Oil Hits $5.77 a Gallon as Collins Pushes for Early Release of Federal Heating Aid - The Maine Wire

Heating oil explained: Where our heating oil comes from. EIA. Late updated October 2023. Where our heating oil comes from - U.S. Energy Information Administration (EIA)