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Heating oil prices top $2 a gallon for first time ever East Coast prices driven by crude oil prices, tight supplies to refineries, approach of spring by The Associated Press
Agroup of New England lawmakers is recommending the creation of a home heating oil reserve the president could tap into when fuel prices skyrocket as they have this winter.
They planned to introduce the measure Feb. 9 in the U.S. House of Representatives, a day after a survey showed the price of home heating oil has topped $2 per gallon in Connecticut for the first time ever.
The measure would direct the Secretary of Energy to store 6.7 million barrels of home heating oil. The Secretary would have the ability to fill this reserve by trading crude oil from the Strategic Petroleum Reserve for heating oil.
“The bill recognizes the necessary, but time consuming process involved in refining crude oil into heating oil,” Rep. John Larson, D-East Hartford, said in a written release.
Other sponsors are Rep. Bernie Sanders, I-Vermont, Rep Sherwood Boehlert, R-NY, Rep. Nancy Johnson, R-New Britain and Rep. Sam Gejdenson, D-Bozrah.
Doris Bellucci, an energy planning specialist for Connecticut’s Office of Policy and Management, said she’s never seen anything like this winter’s oil price spiral.
Connecticut prices set records Bellucci said she had tracked home heating oil prices through the Arab oil embargo of the early 1970s and the curtailed production of the Persian Gulf War in the early 1990s.
But until now, she said, prices had never topped the $2-per-gallon mark.
“It’s a first. We’ve broken all kinds of records,” she said.
A survey Feb. 7 of 10 northern Connecticut fuel oil distributors found the highest prices at from $2.05 to $2.10 per gallon, she said.
Williams Fuel Oil LLC of Manchester was charging $2.10 per gallon; Somers Oil Service was charging $2.07; and West Side Oil Co. of Suffield was charging $2.05. But Fusco Brothers of Windsor was charging just $1.80, 16 percent less than Williams.
Even though wholesale prices for future delivery dipped a bit Feb. 7 on the New York Mercantile Exchange, state officials said there appears to be no end in sight to high retail prices that have ballooned from an average $1.06 a gallon in late December.
Supplies tight, dealers scrambling Alan Johanson, head of the OPM declined to speculate just how high the price may soar.
“We know supplies are generally tight, and dealers are scrambling to get product,” he said.
The problem, Bellucci said, is that retailers are watching the New York Mercantile futures market, which on Feb. 8 was taking March contracts for home heating oil at 75.8 cents per gallon.
She said retailers are afraid of getting stuck with a lot of high-priced oil that they can’t sell next month, when the price drops, so they’re keeping supplies razor-thin. When supplies are low, dealers outbid each other for any available oil supply, driving up the price at the New Haven and Bridgeport terminals, she said.
The entire oil-supply picture has been further complicated, she said, by substantial cutbacks in Arab oil production. Because of this, she said, U.S. refinery production is running at only 86 percent of capacity instead of an optimum 95 percent, further reducing supplies to frigid New England states.
Attorney General Richard Blumenthal said consumers should save their home heating oil bills in the event that the state pursues a lawsuit against their fuel suppliers and a judge orders refunds.
Blumenthal, who has begun a wide-ranging investigation of consumer complaints, said his staff is busy reviewing pricing and other data that fuel wholesalers, dealers, and related companies have submitted to the Department of Consumer Protection. While he hasn’t reached any conclusions, he said, he continues to contemplate some sort of legal remedy to provide consumer relief.
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