Price-gouge charges mount along with heating oil costs
Gallon for gallon, home heating oil prices soon may surpass gasoline prices. This is the contention of Nassau County, N.Y., consumer affairs commissioner James Picken and other consumer specialists.
The reason, according to Mr. Picken: "price-gouging" by oil refiners as federal controls on the price of home heating oil are removed.
Picken told the Monitor the price of heating oil gas gone up, on average, two cents a gallon every week for the last month in Long Island's largely suburban Nassau County, which has about 1 million residents. By April 1, he firmly believes, the average price may be $1.30 cents a gallon, compared with a current average price of $1.12 nationwide. In the past year alone, the average price has shot up 21 cents, a substantially bigger increase than in previous years.
Federal controls on the price oil refiners may charge middlemen (oil "jobbers") have been removed since 1976. But the unusually sharp increases in home heating oil costs in the past year, a time of abundant supplies, Mr. Pickens contends, merit an immediate investigation. He says he will call on the new Reagan administration to do just that. Spot surveys his department has taken have revealed that the prices oil refiners are charging have gone up much more rapidly than the prices dealers have charged homeowners.
According to the US Department of Energy's Energy Information Administration (EIA), the average price of heating oil nationally is currently $1.03, although the price widely fluctuates. Some of the highest prices are being reported in the Boston area, with dealers charging as much as $1.15. The New York City area also has some much higher than average prices.
Figures released Jan. 6 by the EIA indicate that heating oil prices could go up to as much as $1.25 a gallon if crude oil prices rise by $16 a barrel. Most oil analysts do not project such a steep price rise in the immediate future.
The average price of a gallon of regular gasoline at a self-service pump, according to the most recent American Automobile Association survey, is $1.18; the average price of regular at a full-service dealer was $1.25. Unleaded gasoline was slightly higher at both full-service and self-service gasoline stations.
EIA spokeswoman Peggy Dalrymple says although the agency cannot forecast the exact amount of price of home heating oil will go up between now and April 1, "we expect it to be going up."
An analyst with the Petroleum Industry Research Foundation here has forecast that the price of home heating oil may jump to about $1.20 a gallon if crude oil prices rise by as little as $4 a barrel.
Joining Picken in his ire over higher heating oil prices is Stephen Brobeck, executive director of the Consumer Federation of America (CFA), which represents more than 200 consumer groups. He also believes the price of heating oil soon may surpass the price of gasoline. He suggests that irate consumers write their congressmen if they note any instances where they feel oil customers are being gouged.
For its part, the CFA will fight hard in Congress against the gradual decontrol of domestic crude oil and natural gas prices. But how successful its efforts will be is a big question mark -- especially since President-elect Reagan has promised to try to speed up the price decontrol process.
The CFA expects to work with congressional Democrats, including Sen. Edward M. Kennedy of Massachusetts, to vigorously oppose further price decontrol.