A heating oil tank refill will drain about $2,000 from Kate Marshall's budget. 

The 67-year-old retired civil servant needs it for her cabin north of Fairbanks, Alaska, but the pressure on her fixed income extends beyond fuel — food and healthcare are getting more expensive, too.

Here's what to know

Heating oil is the main fuel used by Fairbanks households, with residents paying over $6 a gallon, compared to about $3.75 in 2025, Alaska Public Media reported.

Tanker traffic through the Strait of Hormuz, a major oil passage, has been severely disrupted due to the war with Iran. The conflict has driven oil prices higher.

Citing state data from 2019, Alaska Public Media noted that Fairbanks residents used about 1,230 gallons of heating oil annually — nearly three times the American average.

Expensive firewood and electricity leave Fairbanks residents with limited opportunities to save by changing their heating systems. 

Many Interior households already depleted their heating budgets during a winter marked by prolonged stretches of around 40 below zero.

For homeowners exploring equipment upgrades, Palmetto helps compare efficient HVAC and heat pump solutions and can connect you with vetted installers through its Comfort Plan network, offering a path to manage energy use and limit exposure to volatile, rising oil prices.

More background

Steve Colt, an Alaska Center for Energy and Power economist, explained that communities dependent on diesel face greater exposure to rising fuel prices than Anchorage, where residents have access to natural gas.

Alaska Public Media reported that state fuel surveys put average rural Alaska fuel costs at record highs, 44% above the national average. Some communities face even higher prices.

For residents living off the road system, the timing of fuel deliveries also matters. Colt said many buy and store their winter supply months in advance, so higher prices hit household budgets at different times.

Buying frozen vegetables on sale and limiting the furnace setting are two ways Marshall is stretching her grocery and heating budgets, and she keeps the temperature in her roughly three-decades-old cabin at a level she can afford.

What can be done?

Improving a home's efficiency can help reduce the energy needed to keep it warm.

Dominique Pride, who leads research at Alaska Center for Energy and Power, recommended cost-cutting measures, like putting plastic on windows and, if possible, a home energy audit.

Fairbanks homeowner Melania Stoeber is taking a more extensive approach, removing aluminum siding from her historic downtown home to add panels of foam insulation.

After paying over $1,000 for a heating oil fill-up, she said she could already feel the house retaining more heat.

For larger equipment changes, Palmetto's Comfort Plan offers $0-down options and potential heating and cooling cost reductions of up to 50%. Palmetto Comfort Plans also include 12 years of free maintenance, helping households plan for upkeep alongside energy expenses.

Pairing solar with efficient electric HVAC can further cut utility spending and make a home more self-reliant. EasyHome's solar comparison-shopping tool helps homeowners compare installation offers to find the best deal.

"Because I'm on a budget, I have to keep my furnace at a certain temperature when it's really cold," Marshall told Alaska Public Media. "You just dress warmer."

Where can I learn more?

Across the Northeast, households are also struggling with rising heating oil costs as winter approaches. 

• In New York, heating oil price swings are pushing winter tank fills $540 higher.

• Northeast households brace for $2,300 heating oil bills as the Iran war drives costs higher.

• Pennsylvania homeowners fear choosing between food and heat as oil prices reach $5.50.

• Massachusetts households face $2,627 in winter heating oil costs as Gov. Healey moves to blunt bills.

Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.