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Why heating oil prices have risen in PA, the US and around the world

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Reed Richards fills a heating oil tank in Valencia, Pennsylvania, in 2010.

ASSOCIATED PRESS

Homeowners in Pennsylvania who use heating oil could see their bills increase by 45% this winter due to higher prices and colder temperatures.

The US Energy Information Administration said this month that low inventories of diesel and heating oil fuels will lead to high prices early next year. US inventories ended October at their lowest monthly level since 1951.

According to the EIA, further uncertainty on the world market will result from the European Union’s plan to ban imports of petroleum products from Russia next year.

The price of home heating oil in Pennsylvania this month hit the highest level since the Energy Agency began tracking it in 1990. Prices hit a record $5.86 per gallon for the week ended November 7th. They have fallen to $5.40 this week ending November 21; although that’s $2.16 higher than this time last year.

Why have heating oil prices increased in PA?

Pennsylvania isn’t immune to national trends. The US has seen a “significant” decline in refining capacity in recent years, which has resulted in lower production of heating oil, EIA spokesman Chris Higginbotham said in an email.

“This is a national issue, but its impact is particularly evident in Pennsylvania and the rest of the Northeast,” Higginbotham said. “Philadelphia Energy Solutions’ refinery closed in 2019, and a refinery in Canada that provided significant supplies of diesel and heating oil to the Northeast transitioned to biofuel processing in 2020.”

Refinery strikes in France and seasonal maintenance in the US in October also curtailed supplies, he said. The EU ban on Russian diesel and heating oil, expected to come into effect in February, will intensify global competition as Europe looks for new oil suppliers.

The supply issues are contributing to higher prices, Higginbotham said. Prices also tend to be higher at this time of year as demand increases as the weather gets colder.

The five states that consume the most heating oil are all in the Northeast, according to EIA data. New York is number 1 while Pennsylvania is number 3.

What options are there for reducing energy consumption?

The National Oilheat Research Alliance offers several tips for conserving energy in cold weather. They include:

  • Open the blinds during the day to let in the warmth of the sun and close them when the sun goes down. South-facing windows receive the most sunlight. Windows facing east receive sunlight in the morning, while windows facing west receive sunlight in the afternoon.
  • Make sure radiators are dust free so they are as efficient as possible.
  • Wrap the pipes to limit heat loss and prevent freezing.
  • Do not use space heaters because they are expensive and can be dangerous.
  • Upgrade your oil burner because a modern burner can reduce costs by 15%.

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