High fuel prices, low temperatures squeeze Vermonters

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(Host) Vermonters are facing a one-two punch this winter. Heating fuel prices are at near record highs and temperatures at near record lows. VPR’s Nina Keck reports on why heating fuel prices are so high and what some local organizations are doing to make sure people stay warm:

(Keck) In Rutland alone, between 300 and 400 families are receiving federal fuel assistance, most with help from BROC – the Bennington Rutland Opportunity Council. Pam Shambo is BROC’s Volunteer Coordinator.

(Shambo) “We can easily say we’ve seen about triple the amount of fuel need than we did last year at this time. And more people, brand new faces coming through our doors because fuel prices are high and folks are running out. And then on our end of it, it makes it difficult because funding streams are being reduced every day at the federal level. So it’s tough. It’s a tough year.”

(Keck) Shambo says there’s been about a 20% cut in federal funding so far. Vermonters who do qualify for fuel aid receive up to $600 a year. But because of this winter’s high prices, Shambo says many of their clients have already used up those funds and must now apply for what’s called crisis fuel assistance. She says federal officials have also freed up some emergency funding to ensure no one has to do without.

(Shambo) “Another point I would make is that a lot of these folks are working folks. They either have seasonal jobs or they’re making minimum wage and there’s two people working and they still can’t make it.”

(Keck) According to Vermont statistics, the average cost of propane is now $1.65 a gallon. That’s up from $1.31 in September. Heating oil costs have also gone up from $1.16 a gallon in September to nearly $1.60 today. Shane Sweet, director of the Vermont Fuel Dealers Association, says one reason for the price hikes is simple supply and demand economics.

(Sweet) “Demand for all heating fuel has been off the scale – it’s just been horrific. We’ve had by some accounts the coldest January in 20 years and regional inventories are down, they’re down to begin with. So everything is very, very tight and it has been for the last six weeks.”

(Keck) He says instability in the market due to the threat of war in the Middle East is one reason supply is down. Sean Cota, president of Cota and Cota, an oil and propane company based in Bellows Falls, says an even bigger reason for the current shortage of fuel in the United States is the ongoing civil unrest in Venezuela.

(Cota) “Venezuela is the largest exporter to the United States when you add in the refined products that come either directly or indirectly from Venezuela. And they’ve essentially shut down production for the last month and a half and that’s a huge drop in supply for the market.”

(Keck) Cota says the fact that countries like Italy and France have been relatively warm this winter, has meant much of our fuel is coming from nations that typically sell to Europe.

(Cota) “The Russians have actually been the largest suppliers of spot product in the northeast. And if it weren’t for the Russian product coming into the market, supplies would be even tighter.”

(Keck) Cota says a shortage of natural gas is also affecting fuel prices. The really big users of natural gas – utility companies, universities or large companies for example – are often interruptible customers. That means when natural gas is in short supply the gas companies can shut off fuel to these large clients. Shane Sweet of the Vermont Fuel Dealers Association says these customers must then revert to a secondary fuel source.

(Sweet) “When the natural gas utility can no longer supply the product to these interruptible, these people go offline and then they enter alternative fuel markets – heating oil, propane, diesel. And to use a favorite phrase, it’s like having an elephant jumping in the bathtub. All of a sudden you’ve got this huge demand for product at the worst time.”

(Franks) “Well, the elephant may be jumping in the bathtub, but it’s not Vermont’s bathtub.”

(Keck) That’s Tom Franks. He’s an Energy Efficiency specialist at the Vermont Department of Public Service. Franks says the number of interruptible gas customers in Vermont is really too small to adversely affect price. And he says on average, the interruptible customers here have 10 to 13 days worth of alternative fuel on hand. But Franks admits that there are many more interruptible gas customers in neighboring states and he says when they go offline, it can affect what Vermonters pay for fuel.

So, is there any good news where your fuel bill is concerned? Vermont fuel dealer Sean Cota believes so – he expects prices to drop in the next six to 18 months as the market stabilizes.

(Cota) “I think it’s going to go down rather dramatically. Once Venezuela has its election, you’ll see that the prices will plummet for the crude oil products. And once the war gets under way in the Middle East there will be a lot of excess production in the world market.”

(Keck) In the meantime, community organizations like BROC say there is help available to Vermonters who need fuel assistance now. They urge anyone who needs help to call their town clerk to find out where to apply.

For Vermont Public Radio, I’m Nina Keck in Rutland.

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