1. Why is the cost of home heating oil so high?
The home heating oil market has changed from a buyers’ to a
sellers’ market. Some of the factors underlying this shift include the increased
demand for oil products domestically and globally to fuel economic growth; a continuing
decline in the amount of storage available; and a reduction in the number of terminal
facilities in the Northeast. When the demand for oil exceeds the supply, oil prices
increase. Remember that this is a worldwide situation and not specific just to New
Hampshire.
2. Why aren't prices coming down? I heard OPEC is
producing more oil.
There might be more oil coming to the world market but you must
remember that the US receives only a fraction of that new production. Europe and Asia are
paying much higher prices for fuel than the United States so much of the produced product
is going to these areas. This is truly a supply and demand phenomenon. Demand is strong
while supplies are tight. A former Chief OPEC economist, Masood Samii, feels that this
high price trend will possibly persist for the next 5 to 10 years. He and ECS believe
United States consumers need to be more energy-efficient and consume less if we are to see
price relief.
3. Is there price gouging?
According to the Attorney General's Office and the Governor's
Office, there is no evidence of price gouging. This is a worldwide issue where the demand
exceeds fresh supply therefore creating higher prices.
4. Will the high prices be in effect throughout the
heating season?
There is no accurate and reliable way to predict
the course of fuel prices. Price volatility is expected this heating season and
potentially prices will remain high throughout the season.
The best way to reduce fuel costs is to use less fuel. Visit our page on Energy Saving Tips &
Resources to find out how. Here you can find documents and links such as "Energy
Efficient Home Heating" and "Reducing Home Energy Costs." ECS also
maintains a Fuel Prices
page, which provides current and historic price data for fuels.
5. What is ECS doing about the high prices of oil?
The Governor's Office of Energy & Community Services has no control
or jurisdiction over prices here in NH. However we can encourage citizens to take
measures towards protecting themselves and reducing their energy and heating bills.
We encourage consumers to establish a relationship with a dealer and
set up an automatic delivery plan. This plan ensures that you will have fuel delivered to
you on a regular basis. Those consumers who do not have a similar plan, or are will-call
customers, are often at the end of the delivery list and, in fact, may have difficulties
receiving deliveries. Often NH dealers are very willing to work out budget plans with
customers – be sure to ask if your dealer has such a plan.
During the summer and fall, many dealers offer fixed price contracts
which provide a certain amount of heating fuel during a specified period of time at a
specified price or price range. Learn about the contracts that your dealer offers and ask
questions. Think about how much supply and price risk you are comfortable with. You should
determine if a contract makes sense for you. Be aware that conditions outside the
dealers’ control, such as extreme cold weather or a major refinery/terminal shutdown
may create situations which would affect the dealers' ability to meet all demand. When
supplies are limited, customers with contracts are likely to receive higher priority for
delivery.
ECS also encourages citizens to not let oil tanks run dry; this could
result in a service call, costing you extra money. Changing the filters on your heating
system on a monthly basis as well as having your burner cleaned and tuned up yearly will
help it run more efficiently, therefore cutting down on the amount of fuel used.
ECS is working closely with terminal operators this year to try and
avoid any supply disruptions that might occur. Last year glitches in the supply chain
contributed to the price spikes that we all witnessed. The NH terminals now report their
current inventories to our office on a weekly basis. Meetings have taken place with our
office, terminal operators, and the Governor to develop ways to avoid the situations that
occurred last year.
Our agency encourages citizens to take measures towards energy
conservation and energy efficiency. As well as the information on our website, ECS has
many free
publications with helpful tips for conservation and efficiency. We will be more than
happy to send you a complete listing of our publications.
6. I heat with kerosene and the price is very
high/my dealer is running low. Why is this/what can I do?
Kerosene is at the low end of the barrel in terms of production
– only about 1% of a barrel of crude oil is made into kerosene. One reason kerosene
is in limited supply is that refiners derive more revenue producing other types of fuel.
Jet fuel, for example, also made from the same barrel, brings in more money.
According to the Residential Fuel Supply Survey conducted by ECS, as
well as the Fuel Assistance Survey, 5% of the NH population uses kerosene to heat their
homes. 16% of Fuel Assistance Program recipients use kerosene to heat their homes.
If you find you have run out of kerosene, there is a temporary
solution. Low-sulfur diesel can be mixed with or substituted for kerosene in an emergency
situation. There are a few things to check before continuing on with this option. The
diesel MUST be low-sulfur, or road, diesel. It is recommended that you check with
your heating system manufacturer before adding low-sulfur diesel to assure compatibility
as some systems are unable to burn low-sulfur diesel. Also, check with your fuel dealer
for availability of low-sulfur diesel. Some dealers do not carry this type of fuel. Adding
low-sulfur diesel is a temporary solution only - this fuel can not be burned
for extended periods of time without causing damage to the system.
If you have questions as to whether or not using low-sulfur diesel is
an option for you, you can call your fuel dealer, Oil Heat Council of New Hampshire
(772-0661), or ECS (271-2611) for more information.
7. Should I pay extra for "downside price
protection"?
This is a contract made with your fuel dealer where you pay a fee to
protect yourself if the cash price falls, allowing you to pay the lower price. We expect
prices to go up this winter rather than down, so you might not reap the benefits of this
protection. However, if it is within your means, it is worth considering.
8. What about the 2 million-barrel heating oil
reserve in the Northeast?
The idea behind a Northeast
Petroleum Reserve is to protect New England against severe supply disruptions, which is a
key factor in causing sudden price spikes. It also may encourage market behavior designed
to prevent the need for release of the reserves, including private storage.
We are working closely with other states in New
England through CONEG (Coalition of Northeastern Governors) and NEGC (New England
Governors Conference) to seek to ensure that the rules of the road (e.g. storage location,
release trigger) have been set with the interests of the New England states in mind.
Congress has established a mechanism for the release of fuel from
the reserve. The main trigger for the Northeast Regional Petroleum Reserve will be based
on price as it relates to yearly trends and duration of price spike. The price
differential between residential No. 2 heating oil in the Northeast and crude oil must be
more than 60% greater than its 5-year rolling average for that month; the price must
continue to exceed this equation for at least 7 consecutive days; and the price
differential must be increasing. However, the President may release these reserves at his
discretion at any point in time.
9. I am a low-income household and I want to know
how I apply for fuel assistance?
Contact your local Community Action Agency and apply for fuel
assistance. They will be able to determine whether or not you are eligible.
Community Action Agency telephone numbers:
Belknap/Merrimack in Concord: 225-3295
Rockingham in Portsmouth: 431-2911
Southern NH Services in Manchester: 668-8010
Southwestern Community Services in Keene: 352-7512
Strafford County Community Action Agency in Dover: 749-1334
Tri-County CAP in Berlin: 752-7105
Also, call city/town welfare if emergency situation and HUD (666-7510)
office in Manchester and NH Housing Finance Authority (800-640-7239). Some local churches
as well as the Salvation Army also may provide emergency assistance.
10. I make too much money to qualify for fuel
assistance. Is there any assistance I can get other than the fuel assistance program to
help with my fuel bill?
If you have not called your local Community Action Agency to determine
eligibility, please do this first as the eligibility guidelines were increased this year.
If you are not eligible for fuel assistance and are in an emergency
situation, contact your town/city welfare office. Local churches or the Salvation Army
might also be able to provide emergency assistance.
If you are not in an emergency situation there are some other options
you might explore. Try first working with your fuel dealer to set up a budget payment
plan. Most dealers understand how fuel prices are affecting customers and are more than
willing to help.
The NH Housing & Urban Development (HUD) office in Manchester
(666-7510) as well as the NH Housing Finance Authority (NHHFA - 800-640-7239) might have
other suggestions such as low-interest mortgages for energy efficient measures implemented
in the home. Likewise, some NH towns and cities offer tax incentives for homes that use
renewable energy sources.
There are many other options that are currently being proposed to NH
State and Federal legislators to provide further assistance and incentives to consumers.
ECS has many free publications with energy efficiency and conservation
tips that we are happy to send to citizens requesting information. These can be ordered by
placing a call to our office (271-2611) or visiting our website.
11. I’m interested in learning about the
Weatherization Assistance Program. How do I find out if I am eligible and where do I
apply?
The Weatherization Program is a program designed to assist
low-income households in implementing energy efficient measures to your household in order
to promote energy conservation. Contact your local Community Action Agency for eligibility
requirements and application procedures.
If you are not eligible for Weatherization Assistance, contact your
utility company, as some companies will perform energy audits for their customers for
little or no fee. ECS also has information to aid you in conducting your own home energy
audit, contact us (271-2611) or visit the Weatherization Assistance Program website.
12. I am looking for a new dealer, have you heard
any complaints of "John Doe Oil"?
ECS cannot answer that question but we suggest you try the
Better Business Bureau of New Hampshire (224-1991). Also try contacting the Oil Heat
Council of New Hampshire (772-0661) to check if the dealer is a member in good standing
with this organization.
13. Who can I complain to about a specific company?
Anyone can contact the New Hampshire Better Business Bureau
(224-1991) and the Attorney General’s Consumer Protection Bureau (271-3641) if they
have a complaint about a specific company. Complaints about utility companies should be
directed to the Public Utilities Commission’s Consumer Complaints line
(1-800-852-3793).
