Prepare Now for a Pricey Winter Heating Season
SNOW IS A distant memory, the mercury's on the rise and the kids are packing up for summer camp. Nevertheless, now's the perfect time for homeowners to start thinking about heating their homes come winter.
Typically, each summer, many heating oil providers offer customers the option to sign up for price protection programs, which allow them to lock in prices on heating oil well before a chill starts to tinge the air. (Some providers request an upfront payment where others let you pay that amount over time.) After months of sharp increases in heating oil prices, however, many providers are suspending the programs, leaving homeowners to weather the rise and fall of oil prices on their own.
Without these programs, homeowners will need to brace themselves for a costly winter heating season ahead. Residential heating oil prices are projected to rise 29% to $4.46 per gallon in the fourth quarter of 2008 from $3.16 per gallon during the same period last year, according to the Energy Information Administration. Those who use natural gas to heat their homes (a fair majority at 48% of U.S. households) shouldn't expect to fare much better. The EIA projects the average price of natural gas to rise 27% year over year (from $12.65 per thousand cubic feet in the fourth quarter of 2007 to $17.21 per thousand cubic feet in fourth quarter of 2008).
These bleak projections don't factor in possible disruptions in crude oil (where heating oil comes from) and natural gas production that could occur during the Atlantic hurricane season, which runs from June to November, says Brandon Wright, spokesman for the Petroleum Marketers Association of America (PMAA), a federation of regional and state associations of heating fuel distributors.
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