Feds Say Natural Gas and Propane To Cost More This Winter

In October, the federal government renewed its prediction that consumers will pay more than last year for natural gas and propane used to heat homes this winter. Both higher costs for fuel - propane and natural gas - and a return to more normal wintertime weather were cited as factors.

Nationally, consumers could pay between $120 to $390 more than last year for propane, depending on the severity of the wintertime temperatures. An average of $230 or more in higher propane costs was predicted by the federal agency. For households using propane, a 36 percent rise in heating costs was projected.

Since July, the federal agency has been predicting higher natural gas prices as well. The latest Outlook projected natural gas wellhead prices could be 40 percent higher than last winter. The impact on Nebraska consumers might not be as severe since a significant portion of the retail price is made up of transportation and other costs not expected to change with the wellhead price.

The agency also noted the unusual volatility of natural gas prices since August. However, both import levels and storage supplies of natural gas are nearly equal to last year. Because of adequate supply levels, the agency expected natural gas prices to remain below $3 per thousand cubic feet, except during periods of extremely cold weather.

A 19 percent rise in heating costs was projected for those using natural gas for home heating.

The agency said supplies of both natural gas and propane should be sufficient to meet normal wintertime demands.

The latest Short-Term Energy Outlook  from the Energy Information Administration projected that increased demand and much higher prices for propane and natural gas used for heating would result in higher bills for homeowners.

Updated information on natural gas and propane supplies and prices can be found at the Administration's web site at www.eia.doe.gov

 Return to the Fall 1999 Newsletter