Massachusetts households will face higher heating costs this winter. The fuel oil prices have hit their highest summer levels in three years.
Heating oil prices in Massachusetts averaged $3.73 a gallon last month, up $1 from the same time last year, and 31 cents above the average price last winter.
If prices stay where they are, according to an analysis of US Energy Department data, it would boost the average Massachusetts heating bill by about $225 this winter.
Higher energy costs act like a tax, siphoning money that consumers might spend on other goods and services. Discretionary spending goes way down when heating your home and food take precedence.
Where heating oil prices might go remains unclear. Any number of factors could affect the price, including the progress of the economic recovery, global demand for oil, the strength of the dollar, and severity of the winter.
The key factor, of course, is the price of crude oil, which accounts for about 60% of the cost of heating oil. Crude has been particularly volatile over past few months, going above $100 dropping back to $80 and hitting everywhere in between.
No one knows what oil prices are going to do, but there is speculation that they will not come down. Many expect prices to remain high through the winter, rising at least in the early part of the season. Consumers should not expect oil prices to drop.
Original article Boston Globe