Winter headache – rising fuel costs amid the cold
STAMFORD, Conn. – It was heartwarming news for needy residents struggling through the winter in New England and Alaska.
President Clinton released $44 million in emergency heating fuel funds on Tuesday. Authorities estimate the aid will help tens of thousands of U.S. families in coming weeks.
A sharp and sudden increase in heating oil prices has stunned many consumers, including Alex Terentino of Stamford. He said he feels as if fuel suppliers have him over a barrel twice over.
Terentino has seen the amount he pays for home heating oil go from 99 cents per gallon to $1.89 in a matter of weeks, while his bill for natural gas at his Stamford butcher shop has doubled in the last month.
”You’ve got no choice,” he said. ”You’ve got to pay.”
Clinton said he was releasing the funds after pleas for help from state officials. The money was to go to Alaska and Northeastern states ”which have experienced the greatest hardship.”
”These funds will help keep more American families safe and warm, and we’ll get them out there just as quickly as we possibly can,” he said.
With much of the Northeast gripped by frigid temperatures during the past week, heating oil usage is way up, leading to supply shortages. In East Hartford, fire officials urged residents to lower thermostats to conserve fuel after a major supplier warned of shortages by midweek.
With supplies decreasing, home heating oil prices have risen dramatically. In Connecticut, retail prices shot up at least 40 cents per gallon, to at least $1.70. In Massachusetts, the average retail price rose to $1.74 on Monday, up 57 cents from a week ago and more than double what it was this time last year. And in New Hampshire, retail prices jumped 49 cents in six days, from $1.22 per gallon to $1.71.
Truckers also are feeling the pinch. In New York, the retail price of diesel rose from a low of $1.35 per gallon to a high of $2.06 from Thursday to Monday, according to the New York State Motor Truck Association.
Even kerosene users were seeing steep increases. At French’s Kwick Stop near Hedgesvillle, W.Va, kerosene prices have jumped from 99 cents per gallon a week ago to $1.69.
”People are shocked. I’ve been here 30 years and that’s the highest I’ve seen it,” said Donna French.
Industry analysts say the sudden price increases have been caused by several factors, including the recent cold snap, low petroleum supplies and a decision by the Organization of the Petroleum Exporting Countries to extend existing oil production cuts past an original March deadline.
During the past year, as OPEC has reduced production, prices of oil and gas have skyrocketed.
”If you look at global inventories, they are certainly at some of the lowest they’ve been at in many years,” said George Beranek, an analyst with Petroleum Finance Co., a consulting firm based in Washington, D.C.
Meanwhile, some state officials said they would investigate to see if price gouging was taking place.
”We have clear indications that there are surcharges on bills, nondelivery of product, possible anti-competitive actions and lack of required notices of shortages – all of which may show violations of law,” said Connecticut Attorney General Richard Blumenthal.
Thomas Prescott of Johnny Prescott and Son Oil Co. in Concord, N.H., said any so-called shortage is one created to make money.
”There is no war in the Mideast, no refineries are down, there is no major explosion in the market,” he said. ”It is a normal winter in terms of degree days, and a cold snap of six to eight days should not force prices up one nickel.”