You’re going to have to pony up a little extra for heat this winter if some of the latest reports are true. Accodring to the U.S. Energy Information Administration, New York state already has heating costs at 60 percent above the national average, and some say they will go even higher.
The American Association for Retired Persons (AARP) recently released a report that stated that New York state’s heating costs could go up by as much as 13 percent this year. The survey also indicated that 60 percent of residents over the age of 50 say they have trouble affording their heating bills. AARP state director Beth Finkel told democratandchronicle.com, “Too often, older New Yorkers have to choose between paying their heating bill and paying for their prescriptions.”
There is a dramatic difference between natural gas and oil prices. Natural gas users,
who account for more than half of New Yorkers, are expected to pay around $679 over the winter. However, oil bills, which are expected to drop 2 percent from last year according to the Department of Energy, will cost about $2,064 for the season. Electric costs are expected to be up about two percent this year.
According to the New York Home Heating Oil Price Monitoring Program (NYSERDA), the Capital Region’s heating oil currently costs $3.78 per gallon, down from $4.02 per gallon from one year ago. That is actually a 6 percent drop, a bit more than the 2 percent predicted for this season by the Energy Department, although it’s still early.
According to some analysts, supply and demand is not the lone factor determining prices. For example, there may also be “artificial scarcity.” A six-month study by energy analyst Karim Rahemtulla for the Wall Street Daily alleged that Russia, which controls 80 percent of the world’s natural gas, may be restricting supplies to drive up price. Washington, D.C.-based economist Webster Tarpley alleges that Wall Street banks use financial derivatives (essentially a form of gambling) to manipulate prices. He explained in 2009, “Goldman Sachs and Morgan Stanley between them have in the past year by various estimates accounted for about half of the speculative activity in the commodities markets of London, New York, and other money centers which brought about the doubling of the per barrel price of oil between July 2007 and July 2008, increasing the cost of gasoline to almost five dollars per gallon.”
And of course the value of U.S. dollar, of which all major commodities are primarily valued in, is in constant fluctuation depending on Federal Reserve policies and other factors. Whatever the causes are for prices going up (or down), there will likely be many unhappy New Yorkers when they get their heating bills this winter.
Starting Nov. 18, New Yorkers can apply for Heating Energy Assistance Program (HEAP). It is a federally funded program to assist low-income families. Unfortunately for those experiecing hardship, funding for the program was cut from $204 million to $190 million this year.