Other than greed, can someone please explain why heating costs are rising?

[nightwing1240]

It's bitterly cold and winter has just begun. This just seems unfair and a cash grab.

Had just read this and wanted to ask why it is going up like this.
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It’s freezing. Cranking up the heat is going to cost you

snip

Even before this historic winter storm emerged, experts warned home heating costs would jump this winter to the highest level in more than a decade.

The average cost of home heating is projected to jump increase by 17.2% from last winter to $1,208, according to a November report from the National Energy Assistance Directors Association.

The cost to heat homes is expected to be 35.7% higher this winter than the 2020-2021 winter, the report said.

snip

The financial pain is particularly acute for those who can least afford swings in their expense.

“Home heating costs are becoming increasingly unaffordable for millions of lower income families,” NEADA said in the November report.

As of August, about one in six US families were behind on their utility bills, translating to approximately 20 million households, according to NEADA.

Link - https://www.cnn.com/2022/12/22/business/heating-expenses-winter-storm/index.html

[leftstreet]

1. It's not greed. Capitalism doesn't have morals

Profit takers take profits because we don't stop them

Utilities should be nationalized non profit organizations

[MichMan]

10. Heating oil supply isn't a utility

[dugog55]

2. I was thinking my natural gas bill seemed kind of high last month.

I checked a bill for January 2020 and was paying $4.75 per MCU for gas supply. This months bill the gas supply was $10.99 per MCU. The deliver charges were identical. But, paying 2.5 times as much in just two years? Sure, there will be all sorts of explanations like the War in Ukraine, futures bidding, and some other bullshit. The fact is, they are just gouging us. Period.

[PSPS]

3. Natural gas utilities in the US are already regulated as a public utility

The state's Public Utility Commission (or equivalent) already sets the rate of return so an increase in the rate per therm reflects what the utility pays for the gas.

Heating oil, on the other hand, is more of a free market and you can choose from whom you purchase heating oil based on price.

Electric utilities are mixed. The best rates are always through a Public Utility. If your electric service is through a private utility, it is also regulated, like gas, on its rate of return. However, its rates are always higher because of the demand for profit.

All of this is because gas and electricity providers are granted exclusive rights to service a particular geographical area. Otherwise, there would have to be multiple outside plant (wires, pipelines) installed by competing companies, which isn't practical.

[madville]

4. Natural gas at my public utility is bought years in advance

I worked at one of their natural gas power plants before transferring to another job with them, our current natural gas contracts run until the end of 2023. We’re currently paying about 40% of market rate until they expire, then they’ll likely renew at at least double so customer rates will have to go up to cover that projected increase and hopefully spread it out as much as possible.

[WhiskeyGrinder]

5. "Fair" has nothing to do with it.

[Kaleva]

6. I spent 1 winter with the tstat at 55

I was generally fine during the day as long as I wore a jacket and knit watch cap. In the evening when I usually watched a foreign film on Netflix, I wrapped with a blanket.

It did reduce heating costs but its not something I'd do again unless I had to

[moonscape]

8. Whoa. And I thought I was doing

well with my new miserly budget and the thermostat set at 61. When we had a stretch of rain, the damp cold got to me and I cranked it up to 62 where it still sits. It’s going up to 68 for 2 days for the sake of guests for Christmas and I just might be moved to bring out summer shorts

[Kaleva]

13. I figured I saved about $20 a month.

It's a small house, about 900 square feet, and doesn't cost much to heat. The savings wasn't worth the discomfort but at the time, I was adjusting to living on SSDI and I was making every effort to save money to pay off debts . I ate a lot of boiled potatoes and cabbage that winter too.

[moonscape]

14. It's an admirable effort, to get in touch with

the difference various strategies make and also with our ability to sacrifice. Gets us in touch with those for whom the $20 savings is requisite for survival. We’re blessed that we have a choice.

[Kaleva]

15. I'll send you some links to old threads of mine

where I documented my efforts

[Mopar151]

7. Diesel fuel, Jet-A "kerosene", and #2 home heating oil are very similar.

Which makes that segment of refined hydrocarbons very much in demand, and subject to price spikes!

[EX500rider]

11. Generally number two fuel oil is just diesel fuel

I sell heating oil, our number two is just regular red dyed off-roadiesel.

[Mopar151]

16. The dyed red stuff is supposed to be "off-highway diesel fuel"

Which is permitted to have a higher sulfur content, and more contaminants, than "highway diesel" - which is really clean, low sulfur fuel for modern diesels.
"Highway diesel" is sold undyed, and taxed, so that "The Man" can check and see if you are cutting corners by the presence of a red tint in the fuel! My oil burner does'nt mind it a bit, when I've had to cash'n carry.

#2 fuel oil can be a bit of a crapshoot. Some "old-timers" insist on using it for diesel fuel - the high sulfur content is better for older engines. It will gel in the cold, and has some nasty bacteria growing in it sometimes. Kerosene is often mixed in to counteract gelling, but it's even more expensive (30%+) than highway diesel, and can be unkind to injector pumps.

My truckin' friend has an outside oil tank at his place - He uses Diesel Anti-gel additive, rather than spending extra for kerosene, to keep the heat on when the wind chills pick up.

[EX500rider]

17. They've done away with all high sulfur diesel in the US

All of it is either low sulfur or ultra low sulfur.
The red dyed is low sulfur.

[onenote]

9. current and expected global supply and demand

https://www.macrotrends.net/2479/heating-oil-prices-historical-chart-data

If it simply was greed, the price would still be over $4 as it was in the spring. Its come down as the chart indicates.

[EX500rider]

12. Has to do with OPEC curtailing supply..

... and curtailing Russian exports of petroleum products.

[MichMan]

18. What do you think the correct price should be?

$1 a gallon? $2 a gallon? $3 ?

[nightwing1240]

19. That would take someone much wiser than I on the subject

To determine the correct price. I would say market value and what the American public as a whole can comfortably afford. A lesson that stuck with me since an economics high school class was that it doesn't matter if you are making twenty thousand dollars a year or a million. The price of bread and eggs are the same for both.