Heating costs may rise 25 percent
With oil prices climbing toward $100 per barrel, this winter is expected to drain the wallets of Mohawk Valley residents.
The skyrocketing cost will affect homeowners and motorists on several fronts:
<li>Gasoline: Utica's gas prices reached $3.23 per gallon Thursday, the highest in 2007. </li>
<li>Home heating: Costs are expected to go up by about 25 percent this winter. </li>
<li>Cost of consumer products: Groceries and other consumer product prices likely will go up as stores depend on diesel-fuel trucks for delivery.
<table width="200" cellspacing="1" cellpadding="1" border="1" align="right">
<tbody>
<tr>
<td>HEATING THE HOME</td>
</tr>
<tr>
<td>* The average U.S. household will pay $986 in heating costs this winter, up 10.9 percent from the 2006-07 season and $9 higher than the original forecast made a month ago, according to the Energy Information Administration, the analytical arm of the Energy Department.
* Those who heat with heating oil are expected to pay a record $1,841 on average from October through March, up 25.6 percent from last year and $56 more than originally forecast. Heating oil bills are expected to be more than double compared to four years ago. About 7 percent of U.S. homes use heating oil, mostly in the Northeast.
Source: USA TODAY</td>
</tr>
</tbody>
</table>
Already, residents are feeling the pinch.
Barbara Klein is considering using public transport in the future, she said.
"This is more than what we bargained for," the Utica Board of Education president said as she pumped gas at a station on Genesee Street in Utica.
For Klein and other motorists, there's no short-term relief in sight, according to Ed Welsh of the local AAA office.
"If oil goes to $100 and stays there, we could pay $3.50, $3.75 before Christmas. Prices are going to rise through next week," he said.
As the price of regular takes its monetary toll on drivers, the rise in diesel will affect shoppers' wallets.
"It's never been higher," Welsh said. "It is going to affect the price for anything that we pay for because everything is delivered by trucks. The cost will be passed on to the
<table width="200" cellspacing="1" cellpadding="1" border="1" align="right">
<tbody>
<tr>
<td>COST BREAKDOWN</td>
</tr>
<tr>
<td>How much can you end up paying if oil hits $100 a barrel?
There are 42 gallons in a barrel. At $100, the base price is set at $2.40 a gallon. Add 40 cents for refining and 20 cents for retail and shipping costs. Then add 65 cents a gallon for state tax.
The price would be $3.65 a gallon.
Source : AAA's Ed Welsh; these are based on estimates only</td>
</tr>
</tbody>
</table>
consumers.
Thursday's diesel prices hit a record high of $3.53 a gallon in the Utica-Rome area. Last year, diesel prices in the region averaged $2.60 a gallon.
Winter's impact Mohawk Valley's infamous winter adds to the worries.
The heating season can last up to six months.
With many old houses and apartment complexes, landlords and residents most likely will see utility bills rise by at least 25 percent this winter, officials said.
This doesn't come as good news for landlord George Chard, who owns four apartment buildings in Utica.
Chard paid around $20,117 in utility bills last year during the winter.
"I am very concerned," he said. "We can't pass the cost to them (tenants). It is very difficult."
Chard said his tenants mostly are mostly refugees and low-income residents who are on public assistance. His rent includes heating, he said.
Out of his 19 units, Chard said the return is just modest after the huge utility bills.
Resident Ali Juma moved to an apartment that included heat in the rent earlier this year. Last winter, he ended up paying about $400 in utility bills a month.
"They were a lot," he said.
Those who use electric heating will not suffer as much.
Bryon Beckingham of Candlewyck Apartments in North Utica said he is not worried this winter.
"Our tenants … they won't suffer," he said.
What's pushing the oil prices? Oil prices hit $95.46 per barrel Thursday on the New York Mercantile Exchange at the close of trading.
Such heights were unthinkable last Jan. 18, when oil prices hit a yearly low of $50.48.
The reason?
Simply put, speculation.
With China's growth rate at about 11 percent and its oil consumption on the rise, there are no surplus oil reserves to contain rising oil prices, energy officials said. Global oil consumption stands at 85 million barrels a day.
"We are producing right about 85 million … and we are using what we produce," Welsh said.
Whether prices will continue to rise through the winter, it is premature to predict, Welsh said. Oil prices could go down.
"They have no reason to stay there," he said.
However, one can't discount unforeseen political factors and natural disasters that could prevent the descent, he said.</li>