Written on: December 13, 2021
Every time we have to buy something lately, our wallets have been feeling a bigger pinch.
Fuel costs are no different, which is posing difficulties as we enter heating season here in New Hampshire.
Gasoline prices have risen by more than $1 per gallon from a year ago. Natural gas prices have increased by more than 150%. Crude oil prices have surpassed $80 per barrel, levels not seen in seven years. Propane prices are at their highest since 2014. The cost of electricity is heading up as well, thanks to the industry’s heavy reliance on power plants fueled by natural gas.
At Johnny Prescott, we understand that these fuel cost increases are challenging for you. It’s difficult for us as well. We’re doing everything we can to keep your fuel prices down.
If you are struggling to pay your heating oil or propane bills, please get in touch with us before you fall behind. We’ll do everything we can to help find a solution. You can also turn to New Hampshire’s Fuel Assistance Program.
Why is this happening? Here’s some background on how fuel prices are determined.
Crude oil pricing. The cost of crude oil, which is one of the most important factors in heating oil costs, accounts for around 75% of the overall price. Oil prices can fluctuate widely. Because crude oil is a globally traded commodity, changing global market trends have an impact on its price. Natural catastrophes in areas of production and refinement, supply chain issues, and political conflicts all have the potential to influence the price of oil and what you pay for heating oil in turn.
Weather. When the weather is colder than usual, you should expect to pay more for heating oil. Because demand is high while supplies are restricted, you can anticipate higher heating oil costs during a severe winter. There will be less demand and lower heating oil costs if the weather is nice.
Supply and demand. Demand fluctuations can drastically alter the price of a commodities. If the winter is harsh and lengthy, prices will rise. The propane export boost to meet worldwide demand may have an impact on our nation’s propane supply. Propane pricing is influenced by a number of variables, including season and production and inventory levels. It’s also worth noting that the late Spring and early Summer months, often known as the “shoulder seasons,” are typically a good time to fill your propane tank since prices tend to be lowest at these times of year.
Weather. When the weather is chilly, propane costs may rise. Propane generation can be affected by extreme temperature swings and harsh conditions like rain or snow, resulting in a scarcity that raises prices.
Proximity of supply. The price of propane will go down the closer you are to a major supply and distribution point.
Current events. Because of factors such as oil spills, pipeline malfunctions, ransomware attacks, political conflicts and turmoil around the globe, and the COVID-19 epidemic that has disrupted many industries in North America, propane pricing is unpredictable.
Market need. Customers will pay more for propane in the winter, when they need it the most for home heating. Commercial usage of propane rises during the summer months, when fuel-powered vehicles and equipment are used more frequently.
Get reliable delivery of your home’s heating oil or propane. Become a Johnny Prescott customer!