Winter Heating Costs
Heating oil costs are expected to rise thirty-one percent this winter season.
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Key Points
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Only about 4% of U.S. households use heating oil, but roughly 75% of the nation’s heating-oil consumption is concentrated in the Northeast, according to NEADA executive director Mark Wolfe.
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The EIA’s September outlook projects average retail heating-oil prices of $5.66 per gallon in the fourth quarter of 2026 and $4.94 in the first quarter of 2027. It also projects on-highway diesel prices of $5.55 and $4.93 per gallon during those periods; AAA reported that the national diesel average had reached a record $6.23 per gallon.
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Maine’s average heating-oil price reached $5.39 per gallon on Sept. 8, its highest level since April. The state is especially exposed because fuel oil remains the primary heating source for about 50% of Maine homes.
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Maine Housing reported a 6% year-over-year increase in applications for the Low Income Home Energy Assistance Program, which serves about 40,000 homes annually. Scott Thistle warned that the benefit, typically intended to cover about 100 gallons of heating oil, will cover less fuel as prices rise.
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Massachusetts resident and Marine Corps veteran Tommy Cole Jr. said he relied on federal assistance and space heaters last winter and expects his next heating-oil delivery to cost $5.56 per gallon, underscoring the impact of higher prices on individual households.
U.S. households are bracing for a costly winter, with heating bills projected to rise 8.7% to an average of $1,030, according to NEADA. The hit will be most severe for the 4% of American homes that use heating oil—primarily in the Northeast—where families face bills exceeding $2,300, a 31.3% jump from last winter. The EIA expects retail heating-oil prices to average $5.66 per gallon this fall, driven by escalating conflict in the Middle East that has disrupted global oil supplies and pushed crude past $100 per barrel.
Maine, where roughly half of homes depend on heating oil, is already seeing prices near six-month highs of $5.39 per gallon as of September 8. Maine Housing reported a 6% year-over-year surge in applications for federal energy assistance, signaling the strain on low-income households entering winter. Advocates warn that fixed federal benefit amounts will cover far less fuel as prices climb.
Why Heating Oil Prices Are Spiking Now
Crude oil prices have surged past $100 per barrel, up sharply from around $72 earlier this year, after conflict in the Middle East threatened shipping through the Strait of Hormuz. AAA reported that national diesel prices hit a record $6.23 per gallon in mid-September. Global oil infrastructure disruptions and tight U.S. distillate reserves—sitting 13% below five-year averages—are passing costs directly to heating-oil retailers and consumers.
The EIA projects heating-oil prices will remain elevated through winter, averaging $5.66 per gallon in the fourth quarter of 2026 and easing slightly to $4.94 in early 2027. Connecticut has already seen prices climb 86% over two years, jumping from $3.01 per gallon in September 2024 to $5.61 today, according to WFSB.
The Northeast Bears the Heaviest Burden
While only 4% of U.S. households use heating oil nationally, roughly 75% of all heating-oil consumption is concentrated in the Northeast, according to NEADA executive director Mark Wolfe. That translates to about 4.8 million homes—mostly in Maine, Massachusetts, Connecticut, and Rhode Island—facing the sharpest price increases this winter. Regional averages project heating-oil costs of $2,297 and electricity bills of $1,885.
Maine is especially vulnerable, with roughly 50% of homes relying on heating oil as their primary heat source. The state's average price hit $5.77 per gallon on September 14, just 15 cents below the 2022 record. Boston 25 News reports Massachusetts heating-oil prices are spiking ahead of winter, adding pressure across the region.
Federal Assistance Won't Stretch as Far
Low-income families typically rely on the Low Income Home Energy Assistance Program (LIHEAP), a federal initiative that provides heating fuel assistance to about 40,000 Maine homes annually. Maine Housing warned that benefits historically intended to cover roughly 100 gallons of heating oil will now purchase far less fuel as prices exceed $5.60 per gallon. The program's baseline federal funding remains around $4 billion annually—unchanged from pre-pandemic levels.
Tommy Cole Jr., a Marine Corps veteran and Massachusetts resident, exemplifies the squeeze. He relied on federal assistance and space heaters last winter and now expects his heating-oil delivery to cost $5.56 per gallon. NEADA is urging Congress to boost LIHEAP funding from $4 billion to $7 billion before winter hits, warning that families are "entering winter with no room left in their budgets."
What Comes Next: Federal Decisions Loom
The EIA is set to release its official Winter Household Heating Forecast on October 6, providing updated projections for all fuel types. Experts predict prices will remain structurally elevated through early 2027 unless global oil markets stabilize or geopolitical tensions ease. Meanwhile, states are urging consumers to lock in prices or order fuel early before late-fall spot-market spikes hit.
Congress faces mounting pressure to act. NEADA executive director Mark Wolfe noted that while the Middle East conflict is "thousands of miles away, families will feel it when the heating-oil truck pulls into their driveways." Without federal intervention, low- and fixed-income households will be forced to cut spending on food, healthcare, and housing to cover winter heating bills—escalating utility debt and shutoff risks across the Northeast.
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