What Factors Affect Heating Costs?


Quick Answer

The most essential factors affecting fuel costs, particularly gas and oil, are local competition, supply of the heating source, provider operating costs and the season itself. Costs are also subject to market fluctuations among competing heat sources. For instance, demand for coal or gas may rise when oil prices spike.

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What Factors Affect Heating Costs?
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Full Answer

Seasonality, or annual weather patterns, exerts one of the biggest influences on heating costs, with demand and price in many locations rising correspondingly throughout winter and then remaining lower the remainder of the year. Market forces overseas, especially concerning oil, also influence price dramatically, as the supply available from oil exporting countries depends on such factors as global economics, natural phenomena and geopolitical conditions.

Local conditions also affect cost, especially the prevalence or lack of providers. In locations where there are a large number of competitors, prices tend to stay lower and more stable, whereas locations that are rural or less accessible frequently enjoy fewer options. Local operating costs such as fuel prices, equipment use and maintenance, insurance and fees also determine minimum amounts providers can charge customers. Providers are also subject to state and municipal standards governing the wages, salaries and benefits they offer their workers, all of which affects the total overhead eventually passed on to the consumer.

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