New England heating oil just hit the highest price in the government's records. Washington's answer is a loan you will never see and a pipeline that does not exist.
Heating-oil prices are at record highs, and the government's solution could cost you more in the long run.
If your house burns oil, you are buying it at the highest price the government has ever recorded. New England households paid an average of $6.11 a gallon on Oct. 19. That's up 77% from $3.45 a year earlier. The Energy Information Administration's weekly survey began in 1990.
Maine has the most to lose. About half of Maine households rely on fuel oil to heat their homes, and filling a standard 275-gallon tank costs about $750 more than it did a year ago. That is a car payment, and it leaves through the chimney.
Washington has noticed. Sort of. It is lending the region some oil, pitching a pipeline and wishing you a warm winter. None of the three will lower the price on your delivery ticket before Thanksgiving.
Your furnace drinks what the semi-truck drinks
In September I wrote that diesel had hit a record and that your grocery bill would follow. Heating oil is the same fuel with a different job. The two "generally are the same product," oil consultant Andy Lipow told CNBC.
One of them rides in a truck. The other lives in a tank next to your water heater and bills you by the gallon. Both went up for the same reason: In the war with the U.S., Iran closed the Strait of Hormuz and set off a global energy crisis.
New England walked into winter with the tank already low. The region held 2.46 million barrels of distillate fuel in the week ended Oct. 16. That is 34% less than a year earlier and the lowest for mid-October in EIA weekly records going back to 1991.
Part of the reason is that your heating oil has a passport. Global refiners are making less distillate, so Europe is buying ours. U.S. distillate exports rose 20% in the first seven months of 2026, with much of the extra fuel sent to Europe. The tank in your basement is now in a bidding war with a continent.
The EIA expects homes that heat with oil to spend 21% more this winter, a bill of $2,115 per household from November through March. That forecast already assumes a warmer Northeast. New England weather has never signed anything.
The rescue oil comes with a return data
On Oct. 21, the Energy Department offered to lend up to 315,000 barrels from the Northeast Home Heating Oil Reserve, a federal stockpile in tanks in Maine, Massachusetts and Connecticut. Maine Sens. Susan Collins and Angus King asked for it. The reserve has never been used to lower home heating oil prices, Collins's office said.
This is a loan, not new oil. Every barrel comes with a return date. Companies that take the oil must return the same volume plus a premium. The premium starts at 5% and climbs to 27.5% for a borrower who keeps the oil until September 2027.
Borrow a gallon, keep it until September 2027, and the library wants it back plus a late fee worth more than a quart. That is good for the reserve. Your bill was not consulted.
The whole loan comes to about 13.2 million gallons. Connecticut alone burns 400 million to 500 million gallons a year, according to Chris Herb, president of the Connecticut Energy Marketers Association. "This will have no material impact on prices whatsoever," he said. Tom Kloza of Gulf Oil called it "a pebble in the ocean."
Collins's office counted it as a 13% supply increase for New England. Add 13% to not enough and you still have not enough.
Herb also made the case for keeping the reserve. "The heating-oil reserve is the fire insurance you have on your house," he said.
The Trump administration's budgets proposed shutting that policy down twice, the second time by selling the oil and closing the reserve by 2029. Congress kept it.
Now the administration is filing a claim on the policy it tried to cancel.
A gas pipeline for houses that burn oil
On Oct. 19, two days before it offered the loan, the Energy Department committed up to $42 million in Defense Production Act money to the Constitution Pipeline, a proposed 125-mile line that would carry natural gas from Pennsylvania to New York.
Energy Secretary Chris Wright called the oil loan "a temporary measure to solve a temporary supply disruption" and urged the governors of New York and New England to build the pipeline. He used the word temporary twice in one sentence, which is also how a brother-in-law would describe his stay on your couch.
The department says Northeasterners who heat with natural gas will pay $1,236 less on average this winter than those who use oil. That is true for houses that already have gas. A pipeline does not come with a furnace.
New York has fought this pipeline for a decade and is suing over the federal effort to get around its permits. Washington rediscovered it two weeks before an election.
One side guards its permits like a moat. The other waves the pipeline like a yard sign.
Neither one will put a cubic foot of gas in a New England furnace before the snow melts.
Everyone is betting on the calendar, including you
Your delivery ticket leaves out the number your dealer watches, the way a menu leaves out what the restaurant paid for the lobster. On Oct. 22, heating oil futures for November delivery settled at $4.93 a gallon. March settled at $4.38. September 2027 settled at $3.77.
Those are wholesale prices, before the dealer, the truck and the tax. The further out you go, the cheaper the oil gets, a price curve shaped like a sled run. Traders are betting the shortage eases.
The reserve loan rests on the same bet. Its premium climbs the longer a borrower keeps the oil, which only makes sense if oil is cheaper when it comes back.
Call it calendar risk. The loan, the pipeline and the price your dealer quotes you are all bets on how long this war lasts. Washington gets until 2027 to settle its bet. You settle yours before Thanksgiving, when the truck backs into your driveway.
Futures are a forecast, not a promise, and this year has used forecasts for kindling. Dealers know it: Herb said fewer suppliers are offering contracts that let customers lock in a price.
Five things you can do without an act of Congress
1. Ask for three prices. Get today's cash price, the fixed price for the season and a capped price. When the futures market prices March below November, a fixed price well above today's cash price means you are buying fire insurance. Ask for the premium before you sign.
2. Ask whether the dealer will give you the lower price. Top Tier Oil in Windsor Locks, Conn., will give customers the lower price if the market drops after they order. Others may too, if you ask.
3. Shop around. Prices differ from dealer to dealer in the same state, sometimes in the same town, and the dealer who charged you last year is not entitled to your loyalty this year. "Shopping around does pay off," Mark Wolfe of the National Energy Assistance Directors Association told CNBC.
4. Apply for help before the tank runs dry. MaineHousing urges residents to apply before they are out of fuel. Maine sets its typical benefit at about 100 gallons, and 100 gallons at $6 buys a lot less winter than it did last year. Other states run the same federal program with their own rules.
5. Price the switch honestly. Maine's energy office says moving from oil to an efficient heat pump can save households thousands of dollars a year at current prices. The EIA warns that switching fuels would not necessarily result in lower expenditures for every household. Get a quote for the equipment, not just the fuel. Then sit down.
Live free or freeze
In Kingston, N.H., an 80-year-old named Rick Russman told Reuters he will rely on a wood stove to help heat his home this winter. "Fuel that costs more than $6 a gallon is a huge expense," he said.
He did not wait for the loan, the pipeline or the warm winter. He went with the oldest heating technology in New England: the one that never needed a permit from New York or the Defense Production Act.
Its most expensive delivery arrives in a wheelbarrow.
Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more. His Capital Mischief Substack covers financial markets and geopolitics. Follow him on X here.
-Charlie Garcia
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