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Oil Prices Breaking Records

February 8, 2000

BOSTON (AP) _ For Deb Moriarty, the choice this winter has been coldly stark: Fall behind in rent payments or freeze.

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

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 following 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, and even those who can pay them report 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 was 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,″ said Lisa Raines. 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.″

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