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Mar 23, 2022 1:39:05 PM by Lauren Mangano

How Surging Oil Prices Are Affecting Homeowners

Oil prices are bad for those with home heating oil, and gas price are bad for anyone that drives. But how do these rising prices affect other aspects of your life?
It's no surprise that gas and heating oil prices have been on the rise recently. However you may not think about how this is affecting other industries and your daily spending. We'll look at a few of the areas where U.S. homeowners are being hit with price increases.

Price increases due to Russia Ukraine war


Heating oil prices have been steadily increasing for the better part of the 2021-2022 heating season. Back in October, oil prices were about 80 percent higher than the same time a year prior. Since then, home heating oil prices have only gone up further. With the ongoing Russia-Ukraine war and resulting bans on oil imports, it seems as though they won't be decreasing much very soon. 
These spikes are detrimental to the oil providers, too. Not only does it increase our costs, but it puts us in a tough spot with having to cut back on deliveries to people who can't afford the sky-high bills. 
Unfortunately, oil also affects most other industries due to its influence on things like shipping and manufacturing. This of course means that higher oil prices equals rising prices across the board.


Not only are increasing oil prices affecting heating bills, but costs surrounding homes are rising as well. The energy required for labor, equipment, and shipping are impacting the cost to build and buy homes. Prices for home services are not spared either. HVAC service and installation costs, for example, have seen spikes over the last several months. In January, price increases for some equipment were as high as 12 percent. If you're thinking about upgrading your HVAC system, it's better to get it done sooner than later.


Unsurprisingly, food prices are getting hit too. Labor shortages and supply-chain issues were already affecting grocery stores and restaurants, but the war is now affecting global trading and bumping up prices even further. Global food costs were at a record-high in February, up more than 50% since mid-2020, according to Bloomberg.
In addition, higher oil prices mean it will cost farmers more to operate their equipment (using diesel) and to ship food around the world.


Travel prices increasing

Higher fuel prices have impacted cruises, trains, and airlines as well, in addition to the labor shortages already affecting airfare. 

“Airlines are huge consumers of oil,” said Nela Richardson, chief economist for ADP. But price increases for customers will “depend on how companies are able to hedge that risk and how long oil prices stay elevated.”
This is also met with an increased demand to travel following stay-at-home orders during the COVID-19 pandemic.
It's clear that even those without oil heat for their homes will be impacted in multiple ways; from grocery shopping to purchasing a home, oil prices affect us all.


This entry was posted in Fuel Oil

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