The Associated Press
updated 10/7/2003 4:41:09 AM ET 2003-10-07T08:41:09

If winter temperatures are normal this year, U.S. consumers will see natural gas bills rise 5 percent to an average $841 this winter while the cost of using heating oil will fall 8 percent to an average $927, the government said on Tuesday.

BUT IF THE weather turns unusually frigid, households may be hit with double-digit increases in the price of both fuels, the Energy Information Administration predicted in its annual winter forecast.

“Overall demand for heating fuels is expected to decline this winter,” the EIA said. “This follows from the fact that weather was colder than normal during the previous heating season.”

Natural gas and heating oil are the two main fuels used by U.S. consumers to heat their homes during the winter. Supplies of both were at normal levels on Oct. 1, the start of the winter heating season.

The residential price of natural gas should average $9.17 per thousand cubic feet this winter, up 9 percent from last year, the EIA said. Demand for natural gas this winter is forecast to fall 2 percent to an average 69.7 billion cubic feet per day.

Natural gas prices are expected to rise because inventories were sharply depleted at the end of last winter after weeks of severe temperatures. Stocks of natural gas were refilled throughout the summer, but at much higher prices.

Heating oil demand is expected to decline 8 percent, but the retail price for heating oil is forecast to cost $1.33 a gallon, the same as last winter, the EIA said.

Current supplies of heating oil mean that the government is unlikely to be forced to tap the 2 million barrel Northeast heating oil reserve this winter, the EIA said. The reserve was created by the Clinton administration to use as a cushion in case of weather-related shortages.

American households that use electricity for heating will see their bills rise 2 percent, while those using propane can expect a drop of 3 percent, the government said.

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