Published Saturday, February 15, 2003
prices
taking
their toll
straining budgets
Herald Staff Writer
With heating oil and gasoline costs on the rise, consumers are getting wrung out from paying enormously higher prices.
Sandy and Bud Mellot depend on heating oil for their Pennwood Estates mobile home on Frogtown Road in Lackawannock Township.
The Mellots said October is when they usually restock on oil, about 250 gallons at a time.
The supply they bought in October cost $1.27 a gallon. They had to buy another stock in mid-January, costing $1.44 a gallon. Making the purchase with a credit card also raised the price by 10 cents a gallon, Mellot said.
"Usually a tank lasts through January and February," Mellot said. "Our home is well insulated, but it's been cold this winter. I think everybody is going through their supplies. It probably costs $1.79 now."
Mrs. Mellot said the oil demand causes prices to rise because the companies know people need it. The Mellots expect their new stock to last until the end of the year, but that depends on how cold it is next season.
They said they also worry about oil thieves when prices rise. About four years ago, someone siphoned nearly an entire tank of their heating oil, the Mellots said.
"It's because they can't afford the prices," Mrs. Mellot said. "There was a rash of stolen oil last year (also)."
"We had to put a motion light and padlocks out back," Mellot added.
Nick Strimbu Inc., a trucking company in Brookfield, runs 125 tractor-trailers every day, with each truck getting about six miles per gallon.
Tom Nesbit, vice president of operations, said that last year diesel fuel was in the $1.20 range, but now it's about $1.67 a gallon.
"The cost depends on what part of the country you're in, but it's definitely creating a very severe problem. It's putting a real strain from the operation side," Nesbit said.
Strimbu's tractor-trailers travel mainly east of the Mississippi, said Nesbit, who calculated the cost increase at about $300 more per truck. The company does save a little money by fueling trucks locally before they ship out.
Skyrocketing oil prices will likely continue because of a colder than expected winter, prospective war with Iraq and the loss of production from Venezuela, the second-largest source of oil and gasoline imports for the country.
Heating bills could be 50 percent higher this season than last winter, according to the Energy Department.
This winter, consumers have used 14 percent more natural gas than last season, said Sandy James, assistant communications director at National Fuel Gas Distribution Corp.
"Colder temperatures mean customers are using more gas to heat their homes, thus their bills are higher," she said.
Mike Meath, vice president of Agway Energy Products, acknowledged that heating oil costs are also on the rise. Last year, heating oil cost $1.20 a gallon, and this year it's $1.67, he said.
Meath said that while consumers may wonder why the price of home heating is rising, the proof is in the wholesale increase. Wholesale prices overall are 60 to 70 percent higher than a year ago, with propane about 130 percent higher and natural gas about 300 percent higher, Meath said.
"I'm surprised the consumer isn't seeing a 70 to 80 percent increase in price," he said.
Meath referred to the commodities section of The Wall Street Journal, which compares last year's prices to current prices for crude oil, heating, gasoline and propane sold at the wholesale level.
There are ways customers can save money. Gasoline prices may prove to be less costly when carpooling or driving shorter distances. Customers can also save on home heating simply by maintaining their furnace or boiler. For example, properly tuning up a furnace could save about 10 percent in heating costs, Meath said.
"We spend a great deal of time working with (customers) helping them stretch their energy dollars," Meath said. "Our biggest concern is making sure that they're going to have enough product and will be able to get it."
You can e-mail Herald Staff Writer Larissa Theodore at ltheodore@sharonherald.com