Heating Oil Bills Set to Rise $1,000 in New England This Winter

A winter priced by distant wars

The most expensive heating season in years is landing first on homes that burn oil. The National Energy Assistance Directors Association (NEADA), the group representing the state officials who run federal heating aid, now expects heating oil costs to rise 50% from last winter. Only a few weeks earlier, its estimate was 31.3%.2124 The group blames the wars in Iran and Ukraine, which have disrupted petroleum markets.21

The dollar amounts are what turn this into a household budget story. NEADA expects the average oil-heated home to spend about $2,627 this winter, up roughly $878 from about $1,749 last year.24 In New England, the increase is close to $1,000, and the average bill there is projected at $2,849. In the Mid-Atlantic, which NEADA defines as Delaware, New Jersey, New York and Pennsylvania, households face about $779 more, for an average of $2,429.22 Maine is hit hardest: the projected average is $2,939, compared with $1,664 last winter.24

Pump prices show the problem plainly. Heating oil in Massachusetts reached $6.15 a gallon this week, up from $3.52 a year earlier. New York was at $6.27, up from $3.69. At those prices, filling a standard 275-gallon tank in New York costs about $1,568 instead of $880.21

Why heating oil is taking the hardest hit

The cause is in the refinery. Heating oil and diesel come from the same distillate stream and are nearly identical chemically, so heating oil prices move with diesel.24 Diesel hit a record of just over $6.50 a gallon in the week of September 21.24 The Energy Information Administration (EIA) expects retail diesel to stay above $6 through October before falling to about $4.50 on average in 2027.13

Supply is thin heading into the season. East Coast distillate inventories were 32% below their five-year seasonal average in September, and EIA expects them to stay 20% to 30% below normal all winter.15 The agency says lower global refining output has raised international prices, making imports more expensive and drawing more U.S. supply abroad as exports.12 EIA has also raised its Brent crude forecast to an average of $105 a barrel in the fourth quarter, $14 above last month's projection.15 Heating oil prices react faster than utility bills do. Delivered fuels are not rate-regulated, so changes in wholesale prices usually reach consumers within four to six weeks.12

Where the forecasts diverge

All forecasters agree heating oil bills will rise sharply. They disagree on how much, and they disagree even more about everyone else.

EIA's Winter Fuels Outlook, released October 6, expects oil-heated homes to spend about 21% more, not 50%. Its reasoning is that heating oil prices will average about 34% higher, but a milder Northeast winter will offset part of that.16 The weather outlook is genuinely good news. This is a strong El Niño year, and EIA's forecast assumes the Northeast will be warmer than last winter while the West will be much colder.12

The split on natural gas, the main heating fuel in 46% of U.S. homes, is wider.12 NEADA's September report projected gas heating costs rising 5.8%.3 EIA expects gas-heated households to spend 9% less.16 The American Gas Association goes further and forecasts a 14% drop.6 EIA points to storage: it expects inventories to start the heating season 2% above the five-year average, which should cushion demand.11

The gap reflects both method and incentive. NEADA is lobbying Congress for assistance funding, and the gas industry gains when households expect cheaper gas.6 The two groups also measure different things. NEADA's often-cited $1,030 average combines all heating fuels, while the AGA's $497 figure covers gas space heating only.6 For most of the roughly half of households that heat with gas or propane, EIA's view that bills will be flat to lower looks like the more reliable baseline.13 The $1,000 headline applies to a much smaller group. Oil-heat homes make up only about 3% of U.S. households, and most of them are in the Northeast.12 Within that group, though, the burden is concentrated. About 82% of the nation's heating oil is used in the Northeast.21

Electricity: the slower, wider squeeze

The longer-lasting story is electricity. EIA expects the more than 40% of homes that heat with electricity to pay about 4% more this winter, with residential prices up 3%. The West faces the biggest increase, about 9%, mostly because of colder weather.12 NEADA's estimate is higher, at 9.0% for electric heating.3

The one-year number matters less than the trend. NEADA calculates that electric heating costs have risen 35.7% since the winter of 2021-22. Natural gas heating costs rose 16.9% over the same period.1 The group lists several causes: higher interest rates that make power plants and transmission more expensive to finance, rising generation costs, fast demand growth driven partly by data centers, aging grid equipment, and weaker federal incentives for renewables.1

The pressure is building in specific regions. EIA expects wholesale power prices to average $52 per megawatt-hour in 2026, 11% more than in 2025. Prices in the PJM market, which covers much of the Mid-Atlantic, are up 41%.13 More than 275 electric and gas utilities have raised rates, won approval for increases, or proposed them since 2025. Together, those actions could add over $101 billion to customer bills through 2028.3 Cheaper gas will not pull those bills down, because household electric rates also cover transmission, distribution and capacity costs.18 Electricity is likely to keep rising after this winter's oil spike fades.

Rebates shrink just as the case for switching grows

In principle, high oil prices make a heat pump more attractive. In practice, the incentives that made switching affordable are smaller than they were a year ago. The federal 25C tax credit, which covered 30% of heat pump costs up to $2,000 a year, ended for equipment installed after December 31, 2025.36 The main federal help left is the state-run Home Electrification and Appliance Rebates (HEAR) program. It offers up to $8,000 for a heat pump, but only to households earning up to 150% of area median income.31

Availability depends heavily on where you live. One mid-2026 count found about twelve states plus Washington, D.C. running HEAR programs, including Maine, New York and Rhode Island.33 Colorado shows how quickly the money can run out. Its single-family HEAR program has closed in both regions, and applications for Region 2 submitted after August 1 are being denied.32 In New Hampshire, HEAR has been approved but is not expected to launch until fall 2026, and Connecticut's program is funded but not yet open.31 Mass Save in Massachusetts still offers sizable heat pump rebates with no income limit.38

The result is a mismatch. The households facing a $1,000 oil bill increase are concentrated in New England, where rebate programs are uneven and many middle-income homeowners now qualify for nothing from the federal government.

Remodeling budgets are already stretched

Higher heating bills come as homeowners are already spending more on keeping houses running. Harvard's Joint Center for Housing Studies expects growth in remodeling and repair spending to slow from 2.1% in the third quarter of 2026 to 0.5% by mid-2027, with annual spending of about $519 billion.45 Angi data show the typical household spent $12,472 on home projects in 2025. Nearly all of the increase went to maintenance and emergency repairs, while spending on improvements stayed flat.41 Seventy-one percent of homeowners put off a planned project, and 92% of them cited rising costs.41

The U.S. housing stock is also getting older, which means more furnaces and boilers are wearing out at once. The typical home has aged from 31 years old in 2006 to about 41.41 A household that has to replace a failing oil system this year, without the 25C credit and possibly without access to HEAR, faces a much harder choice than it would have a year ago.

The safety net is the real test

Assistance programs cover only part of the gap. The average LIHEAP heating benefit in fiscal 2025 was $467. That is about half of the $1,000 increase some New England families face, before counting the rest of their bills.23 Low-income families in the Northeast are expected to spend about $1.1 billion more on heating oil this winter.24 For retirees, the cost-of-living increase to Social Security due in January will not come close to covering it.22 NEADA has asked Congress for $3 billion in emergency LIHEAP funding.21 Separately, it wants the program's base funding raised from $4 billion to $7 billion.3

The broader picture is a household energy system under pressure in two ways. Oil prices create sudden, painful spikes in some regions, while electricity costs rise steadily everywhere. Federal policy has scaled back the tax credits that helped families get off oil. The El Niño winter offers some relief, but a sustained cold spell would push bills above every current forecast.4 One analyst at Raymond James expects energy costs to become an issue in the midterm elections.24 With diesel above $6 and the season about to begin, that seems likely.