For Education and Pure Enjoyment Only!

Northeasterners grappling with record high heating oil prices

BOSTON (February 8, 2000 9:48 a.m. EST http://www.nandotimes.com) - Deb Moriarty faces a coldly stark choice this winter: Fall behind in rent payments or freeze.

"I started getting behind in November," the Scarborough, Maine, office assistant said. "In December I was still behind until I received the fuel benefit."

Now, with oil prices breaking record highs and all but $100 of her $459 fuel assistance gone, Moriarty has even more cause for concern as fuel prices soar.

Across the Northeast oil costs continue to rise, driven by greater demand after the arrival of wintry blasts of cold air and sustained production cuts by the Organization of Petroleum Exporting Countries.

The cost increase is most acute in the Northeast. The regional average rose to about $2.10 per gallon in mid-January from about $1 a year ago, according to the New Hampshire governor's planning office.

Moriarty has tried to cut back on her heating fuel use by covering windows with plastic, dropping the thermostat to 62 degrees and putting on a sweater - and a jacket.

"When the oil runs out I'm going to be in the same boat of making that choice again," she said Monday.

Thousands of low-income people who have found their heating bills twice as big as last winter have applied for government assistance. Even those who can pay the bills report that they are struggling.

"Sooner or later I'll cut something out - I don't know what my priorities are yet, but you need heat," said 79-year-old William Gracia of Providence, R.I.

Responding to consumers grumbles, New England politicians have called on Washington for relief. Last week, President Clinton approved $45 million in federal emergency assistance to help out the frigid Northeast.

The Clinton administration now is trying to decide whether to dip into the nation's Strategic Petroleum Reserve for only the second time to drive down prices.

Next week, Energy Secretary Bill Richardson is scheduled to hold hearings on the issue in Boston. The hearings also will explore whether price-gouging has occurred.

In New York, fuel consumers have been hit with a double-whammy: the cost of oil is $2.50 a gallon - and there's a short supply. Several heating companies on Long Island and in Westchester County were completely without oil for parts of last week, and industry officials say they are scrambling to keep up with high demand.

The average price of heating oil in Maine rose to $1.78 a gallon, an increase of 12 cents from last week and $1.04 higher than the statewide average at this time last year, the State Planning Office said.

In Massachusetts, oil prices hit a record high of $2.04 a gallon on Monday - more than double the 90-cent price at the same time last year.

"This summer, we're changing to gas," Lisa Raines said. She said her heating bill doubled this year at her three-family home in Boston's Dorchester neighborhood. "Enough is enough."

And business people across the region also were grappling with how to avoid going into the red.

"In my mind, I can't raise my prices 50 percent to cover what I'm trying to grow now," said Bob Chafe, owner of Salisbury Gardens in Salisbury, Mass.

His three greenhouses, where this spring's flowers are budding, burn through about 225 gallons a day. Heating them at $1.70 a gallon is costing him $2,677 a week, compared to $1,071 last year when he paid 68 cents a gallon.

He hopes to recoup his losses by growing more flowers than he normally would.

The high price of diesel fuel also is forcing some truckers and transport companies to pass the costs on to consumers or even keep their rigs off the road.

"Anybody who's operating with the prices this high is out of his mind," said Mike McClellan, a 31-year-old independent trucker. "I don't like parking my truck, but that's an extra $440 or $450 a week that comes out of my pocket."

McClellan said high fuel costs may force him to sell his truck and switch jobs. With the national average at $1.45 a gallon, larger transport companies are taking drastic steps too.

"We're refusing to take freight into some of those high-priced areas," said Roy Romans, chairman of an Omaha, Neb., company. "Where we can't get fuel surcharges that will cover the cost, we just turn down the business."

By CATHERINE IVEY

Link

-- Henry Howfambofergilfer (howfambofergilfer@hotmail.com), February 08, 2000

Answers

Henry, there ain't a whole lot of enjoyable stuff there. As a matter of fact there isn't ANYTHING that I can find that might be enjoyable. 'Course they say we Medics have a skewed sense of humor. Must be I'm just skewed the wrong way.

Feh.

Chuck

-- Chuck, a night driver (rienzoo@en.com), February 08, 2000.

Howdy, Folks!

I found this part of this post particularly interesting:

"'In my mind, I can't raise my prices 50 percent to cover what I'm trying to grow now,' said Bob Chafe, owner of Salisbury Gardens in Salisbury, Mass.

His three greenhouses, where this spring's flowers are budding, burn through about 225 gallons a day. Heating them at $1.70 a gallon is costing him $2,677 a week, compared to $1,071 last year when he paid 68 cents a gallon.

He hopes to recoup his losses by growing more flowers than he normally would."

This is the first listing of a financially suffering luxury product/ service based business that I have read in connection with the oil crisis and possibly Y2K(sorry; I don't have time to read all of 'em; I'm sure they're others). I also find Bob's solution an interesting one, given that he doesn't seem to have many other options.

Think about it, folks. If you had the choice of putting rice and beans on the table and heating your home against the bitter cold OR buying flowers/bonbons/a tennis bracelet/whatever trinket, what would you do?

This comes from Cory Hamasaki's site, from WRP # 100 -

http://www.kiyoinc.com/WRP100.HTM

"Analysis ----------- Nunja Biznec -----

Nunja, another net-name, is newer to the computer game. Nunja, like SHMUEL and Infomagic has thought long and hard about the possible effects of Y2K. Nunja's article was originally run in c.s.y2k and is reprinted with permission.

11) ...drive slowly through any suburban shopping district and count all the stores that sell only greeting cards. Or paint toe nails. Or a thousand other things that are dependent on large numbers of people having disposable income. how many travel agents will be needed after the coming crash? how many cdrom stores? video rentals? how many 24 hour a day grocery stores when all the other people are out of work?"

When the prices of fresh flowers go up 50-100%, many, many people that buy them now will stop buying them because they will be viewed as an unnecessary luxury item. With this in mind, I'm guessing Bob realizes that he can't really afford to raise his prices much; if he does, he has no income. If he doesn't raise prices, he can't offset added winter fuel costs due to price hikes.

I fear that lotsa folks in some of the above related industries are gonna go outta business this year for the very reasons that Bob is having difficulties right now; products that they depend on for their businesses will no longer be available at the prices they count on to make their razor thin profit margin.

We are so dependent on cheap oil; truly frightening...

Peace and love, y'all; keep warm.

Don

-- Shimoda (enlighten@me.com), February 08, 2000.

On the other hand...

I wonder if Bob has considered diversifying. Grow some flowers, but also raise expensive, organically grown luxury fruits and veggies!

Sell the luxury produce during the good times; people will pay extra for organically grown exotic produce.

Sell the luxury produce during the bad times; people will pay out the nose for food if they and their children are starving.

Just a thought...

Peace,

Don

-- Shimoda (enlighten@me.com), February 08, 2000.