Rising Heat Costs Create Consumer Crisis
The predicted rise in heating costs has come to pass, with disastrous results for those who heat with oil. While the cost of heating with gas and electricity is also on the rise, those consumers have some protection. Most states don't allow disconnection of utility services during the coldest months of the year. For those who heat with oil, however, the tank simply runs dry. In New England, where 80% of the nation's heating oil is used, low-income consumers have to make hard choices: sometimes the choice between heating their homes and buying other necessities like food and medication.
Although the federal government provides assistance through the Low-Income Home Energy Assistance Program, those funds aren't nearly adequate to address the current crisis. The state of Maine, which has thus far received $24.2 million from that program, has provided heating fuel for about 48,000 households. However, that covers only about 180 gallons of fuel per household. That's less than a tank, and less than a quarter of what the average household requires to make it through the cold New England winter. Most households maintaining temperatures of 65 degrees or lower use 5-10 gallons of oil each day.
Massachusetts and Rhode Island are experiencing similar problems. While hurricanes Rita and Katrina had some impact on the cost of heating oil, the underlying problem is much bigger-and more long-term. As developing countries have steadily upped their energy requirements, production has not kept pace with those demands.
Massachusetts has made arrangements to buy heating oil from Venezuela, and Maine and Rhode Island are negotiating to do the same. Massachusetts also authorized $20 million in state funds for emergency heating, about triple last year's allocation. Maine created a $5 million fund to help pay for heating costs, though the state has never before supplemented federal energy assistance.
Still, these measures haven't bridged the gap. In many areas, funds are exhausted-or nearly so-with nearly two months of winter weather ahead. While state officials continue to scramble for solutions, New England residents keep a wary eye on their oil tanks and turn their thermostats a little lower, hoping to make the precious fuel last. If help doesn't come soon, we may see an increase in bankruptcy filings in that region as consumers are forced to decide between heating their homes and paying other bills.