With the winter months approaching, consumers may be forced to cut down on their holiday shopping as they prepare for critical expenses such as heating their homes.
And this year, according to the U.S. Energy Information Administration, EIA is going to take a sizable chunk out of some budgets.
With higher propane prices and slightly colder temperatures this winter compared to years past, the EIA projects that U.S. households that primarily rely on heating with propane will spend nearly 50% more during this heating season. While the Northeast and the Midwest will spend 47% and 43% more, respectively, the Northeast is projected to spend upwards of 69% more, according to the EIA.
The heating season, according to EIA, spans from October to March.
The main contributor to this increase will be higher wholesale propane prices, which are being driven by high propane inventory levels coupled with low wholesale prices, according to the EIA.
At the same time, AccuWeather s Senior Meteorologist Paul Pastelok predicted that it will be a busy winter season nationwide, especially in the Northeast, which could see an early arrival of winter weather.
This winter, I think, is going to be a colder one, at least for the interior sections from the Ohio Valley and Great Lakes to the Appalachians, Pastelok said, noting that winter will average between 1 to 3 degrees Fahrenheit below normal.
Roughly 5% of all U.S. households use propane to heat their homes, according to EIA. However, at least 14% of homes in Vermont, New Hampshire, South Dakota, North Dakota and Montana use propane, the agency said.
The agency projects that seasonal expenditures for the average household using propane as a primary fuel source will be $2,012 in the Northeast, $1,805 in the Midwest and $1,643 in the South.
Burt Flickinger, managing director of Strategic Resource Group, told FOX Business that consumers are going to feel the effects for the foreseeable future.
All of a sudden, between higher home heating bills and having to buy generators, they're looking at thousands of dollars on anticipated unplanned expenses that will continue for the foreseeable future, Flickinger said, adding that families are going to spend at least $1,000 more per year for heating.
In some areas, like across New England, families could expect to pay up to $2,000 more, according to Flickinger.
This means, there isn't going to be enough money for the increased prices of clothing to consumables, most notably food, he added.
Consumers are going to cut back everywhere, you've got to cut back on gift-giving. You've got to cut back on entertainment. It's going to cut back on eating out, Flickinger said.