Heating oil shock puts a new squeeze on Northeast borrowers
Retail prices in the region are already far above last year’s. Massachusetts’ weekly dealer survey put the average retail price at $6.12 a gallon on Oct. 5, up from $3.53 a year earlier, an increase of nearly three-quarters. In Maine, the state Department of Energy Resources found a statewide average of $5.96 in its Sept. 28 survey, roughly 79% above the $3.33 it recorded in late September last year.
The National Energy Assistance Directors Association, which represents the state officials who run federal heating aid, projects a larger increase than the EIA does. Its late-September estimate has the average oil-heated home spending about $2,627 this winter versus $1,749 last year, a rise of roughly 50%, Money Talks News reported. Its estimate has risen quickly. In July, the group was projecting around $1,700, and by mid-September it was closer to $2,300.
Prices also vary widely from one dealer to the next. In the Massachusetts survey, the cheapest tenth of dealers charged $5.69 a gallon or less, while the priciest tenth charged $6.61 or more. That 92-cent spread adds up to about $140 on a typical 150-gallon delivery. “Shopping around does pay off,” NEADA executive director Mark Wolfe told CNBC.
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What it means for borrowers
A heating bill never shows up on a loan estimate, and standard debt-to-income calculations leave utilities out entirely. But it comes out of the same paycheck as the mortgage. Spread across the five-month season, the EIA’s $2,115 forecast works out to about $423 a month for heat alone.
