Americans who use heating oil to keep warm in the winter are facing price spikes due to tight supplies of refined fuels globally.
The U.S. Energy Information Administration expects home heating oil prices to average $5.26 per gallon, up 34 percent from last year. The agency expects the average household using heating oil to pay $2,115 from March through November, 21 percent more than last year. The expected cost increase comes even with the EIA anticipating a milder winter than last year, which would allow consumers to use less heating oil.
The price increase comes amid tight global supplies for refined products. Prices for fuels like diesel, heating oil, and jet fuel are rising because of military strikes on refineries in the Middle East and Russia, as well as reduced fuel exports from China, according to CNBC.
Heating oil is basically the same as diesel fuel, minus additives needed for modern diesel engines, plus red dye used to mark heating oil for non-road use. In the U.S., diesel fuel prices reached a record high of $6.51 per gallon on average in September.