OT.
Feds Help With Heating Fuel Funds
JANUARY 26, 09:08 EST
By DENISE LAVOIE
Associated Press Writer
Needy residents in New England and Alaska have gotten some hand- and heartwarming news in their efforts to survive the cold snap that has driven up fuel prices: President Clinton's release of $44 million in emergency heating fuel funds.
The president, responding to a sharp increase in heating oil prices, on Tuesday ordered the release of the money. Authorities estimate the aid will help tens of thousands of U.S. families pay for their heating fuel in coming weeks.
The sudden price increases have stunned consumers.
Alex Terentino of Stamford, Conn., who says 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 a gallon to $1.89 a gallon 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. You've got to pay,'' said Terentino.
With much of the Northeast gripped by frigid temperatures during the past week, usage of home heating oil was way up, leading to supply shortages in some areas.
In East Hartford, fire officials urged residents to lower their thermostats to conserve fuel after a main supplier, Motiva Enterprises LLC, said it expects to run out of oil by mid-week. Several residents in two town trailer parks went without heat for two days when their fuel wasn't resupplied in time.
With supply decreasing, home heating oil prices have responded by rising dramatically. In Connecticut, retail prices shot up at least 40 cents a gallon, to between $1.70 and close to $2 per gallon. In Massachusetts, the average retail price rose to $1.74 a gallon 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 are also feeling the pinch because of sharp increases in the costs of diesel fuel. In New York, the retail price of diesel fuel rose from a low of $1.349 per gallon to a high of $2.059 per gallon from Thursday to Monday, according to the New York State Motor Truck Association.
Even kerosene users were seeing steep price increases. At French's Kwick Stop, near Hedgesvillle, W.Va, kerosene prices have jumped from 99 cents a 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.
Clinton said he was releasing the emergency funds after being inundated with pleas for help from state officials. The money was to go to Alaska and the Northeastern states ''which have experienced the greatest hardship.''
In addition to Alaska, the states to receive the aid are: Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont.
''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,'' Clinton said.
Industry analysts say the sudden price increases have been caused by several factors, including the recent cold snap, OPEC's decision to extend existing production cuts past an original March deadline, and low petroleum supplies.
''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 private consulting firm based in Washington, D.C.
Energy Secretary Bill Richardson on Tuesday ruled out using the U.S. strategic oil reserve to help ease the price spiral. He said, however, that he plans to meet with oil ministers from Saudi Arabia, Mexico, Venezuela and other countries in coming weeks to discuss oil prices and yearlong production curbs by OPEC producers.
During the past year, as the Organization of the Petroleum Exporting Countries has reduced production, prices of oil and gas have skyrocketed.
Last winter was warmer than normal, and heating oil prices remained stable and in some cases, dropped slightly during the season.
Wholesale prices for heating oil for delivery the following month traded on the New York Mercantile Exchange were hovering around 32 cents a gallon. On Tuesday, heating oil for February delivery closed at 90.38 cents a gallon, off a high last week of 93.50 cents.
Independent drivers in Connecticut were paying $1.37 for heating oil on Tuesday, officials said.
Officials in several states said they were investigating 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.''
wire.ap.org |
