Heating oil prices still going up
www.norwichbulletin.com Wednesday, March 5, 2003 By BRIAN LYMAN Norwich Bulletin
NORWICH -- Ken Messier used to quote oil prices to customers several days before delivery. But with temperatures so low this winter and oil prices rising so quickly, he now waits until the night before delivery.
"The worst is: The elderly are getting slammed," said Messier, co-owner of Family Discount Oil in Taftville which services 5,000 customers in eastern Connecticut. "They can't afford this."
The price of home heating oil has jumped 10-11 cents per gallon since last Friday.
At Family Discount, it's gone from $1.649 per gallon to $1.759; at Viking Fuel in Oakdale, from $1.649 to $1.749; at Brodeur's Oil Service in Norwich, from $1.799 to $1.849.
Most blame continuing jitters about war in Iraq and a general strike in Venezuela aimed at ousting President Hugo Chavez. A month ago, the Norwich Bulletin reported on a spike caused when the U.S. government bought up all jet-fuel surpluses.
"We would say Venezuela is more important than Iraq at this moment," Steven Guveyan, executive director of the Connecticut Petroleum Council said. "It provides roughly 13 percent of U.S. imports, and the Northeast is hit particularly hard; more than that percentage is true in the Northeast. A lot of that is home heating oil."
The colder-than-usual weather this winter has led some people in the state to exhaust oil bought at fixed prices last year.
"Everyone understands this has been a really cold winter," John Mengacci, undersecretary for strategic management in the state Office of Policy and Management said. "Most of the folks who had locked in volumes against contract have to buy in a spot market, which is why you see the prices moving."
Gasoline prices in the state also have gone up, though not as dramatically as heating oil; the average price of gasoline in Connecticut Tuesday was $1.75 a gallon, up 15 cents from last month. Gasoline cost $1.20 per gallon this time last year.
Venezuela is beginning to produce some oil again, meaning war clouds are playing a larger role in determining prices.
"Usually, when military action starts is when the price takes off like a rocket," Guveyan said. "If it's short, and goes according to plan, the prices will go down quickly. Whether that happens or not, I don't know."
The course of war also makes it difficult to forecast summer prices, including whether gasoline prices shoot above $2 this summer. For now, Family Discount is trying to keep up with the demand.
"We've been at capacity every day," Messier said. "Every single day. The oil prices are sky high, but you still have to heat the house."