Americans should expect heating costs this winter to jump by as much as 54 percent, the Biden administration’s Energy Department said on Wednesday.
The cost of natural gas, which is the heat source for nearly half of all U.S. households, will be up 30 percent compared with last year, according to a government forecast. Global shortages for the fuel source have pushed it to its highest price since 2014, soaring 90 percent over the last year. Propane and heating oil, which are used by 9 percent of households, will also jump 54 and 43 percent, respectively. The cost of electricity, which is used to heat 41 percent of homes, will increase 6 percent.
The cost of energy commodities has soared over the last year, climbing 42 percent since September 2020, according to the Labor Department. Elevated energy prices have driven the country’s surge in inflation, which jumped 5.4 percent over the last year—the highest rate in more than a decade.
President Joe Biden, whose administration prohibited new gas and oil drilling permits on federal lands, has faced criticism for the spike in energy prices. Nearly 80 percent of voters blame the president for the country’s increase in inflation, according to an August poll.
Sluggish economic growth and steep inflation have prompted some economists to warn about the return of “stagflation,” which crippled the economy in the 1970s. A spike in energy prices in the coming months could worsen the country’s inflation problems, according to analysts.
“I am actually getting quite concerned as we head into winter … we could see a very sharp spike in energy prices into the last quarter,” Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte., told Bloomberg last month. “That may feed through into ever more inflation.”
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