August 15, 2008

Options Few, Prices Up for Home Heating

Filling a home's oil or propane tank this summer may not give U.S. homeowners much of a break on the heating bills this year, energy analysts said.

The run up in commodity prices from January through June means "the traditional lower summertime rate is not as low as it used to be," David Fox, a spokesman for the National Low Income Energy Consortium, told CNNMoney.

Even "prebuying" options, allowing homeowners to contract early as a hedge against rising prices may backfire this year, given the "tremendous volatility" of commodity markets, said Matt Cota of the Vermont Fuel Dealers Association.

"Prebuy is not the slam dunk it used to be," Cota said.

Average home heating bills are expected to jump 20 percent this year to $1,182, the Energy Information Administration said.

In the Northeast, where 8 million homes heat with heating oil, the average heating bill will each $2,725, the report said.

"When gas prices go up, consumers Â… can drive less or use public transportation," but, when it comes to home heating, consumers have fewer options, EIA economist Tancred Lidderdale said.