Winter heating bills loom as the next inflation threat

Last winter was warmer than average, leading to relatively low residential energy bills. This season, heating costs could reach levels n...

Last winter was warmer than average, leading to relatively low residential energy bills. This season, heating costs could reach levels not seen in a decade, even if there is no harsh winter. Several factors – declining global fuel inventories, incentives for producers to let prices rise, and a mismatch between supply and demand as economies emerge from the pandemic – can combine to drive up bills despite all.

Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, a group of state officials that administers aid to low-income households, says those who live on paychecks, or are just trying to save money, , will not be appeased by complex explanations of inventory levels, supply chains or global demand. When the bills start coming in in December or January, he said, “the public is going to get angry.”

Forecasts from experts suggest that the southern half of the country, which has milder winters and relies on relatively cheap electricity for home heating, could enter the spring largely unscathed. But the northeast and northern plains, as well as the country’s rural areas, are much more dependent on heating oil and propane, which are heavily exposed to price spikes in commodity markets.

Reflecting the particular concern of their region, a bipartisan group of senators from New England – led by Susan Collins, Republican of Maine, and Jack Reed, Democrat of Rhode Island – sent a letter to the White House last week, urging “targeted action” to provide relief “given the current state of energy markets”.

Last week, the Biden administration released 90% of the $ 3.75 billion in funds dedicated to the Home Energy Assistance Program for Low-Income People, which has provided an average of $ 439 to more than five million families in the year before the pandemic. It received $ 4.5 billion in additional emergency grants this year. Usually, program funding is not released until all budget items for the year are approved, but Congress recently made an exception as the cold months approach and spending continues.

Wolfe’s group urged Congress to include an additional $ 5 billion for the program in the social safety net being negotiated in Washington.

Rising home heating costs are sure to loom over economic debates in Washington over inflation. White House allies, struggling to push forward the president’s broad agenda, say the current spike in consumer prices primarily reflects the pandemic disruption that will dissipate next year. Federal Reserve officials, who have tried to put in place a less inflation-sensitive policy framework, will be pressured to assess whether this claim is correct.

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Newsrust - US Top News: Winter heating bills loom as the next inflation threat
Winter heating bills loom as the next inflation threat
Newsrust - US Top News
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