Aid can't keep pace with high oil prices

from The Boston Globe

Eat or heat: It's a dilemma for many

By Rich Fahey

Officials at area nonprofit agencies that administer fuel-assistance programs for low-income families say their clients have exhausted their benefits much faster this winter because of high fuel prices, and many are spending rent or food money to stay warm.

On Monday, full-service fuel oil dealers in the state were charging an average $3.52 a gallon, the highest price in history, according to the Massachusetts Oilheat Council, and more than a dollar over the price of $2.44 a gallon a year ago. The price has increased 80 cents a gallon just since the start of the heating season in October. Meanwhile, the maximum amount of government-subsidized fuel aid for a family of four making less than $20,000 a year is capped at $1,165.

"Our clients are nervous and frightened," said Beth Ann Strollo, executive director of Quincy Community Action Programs and director of the Massachusetts Association for Community Action, the statewide umbrella group for the agencies that administer many state and federal programs. "At current prices, even the maximum benefit is good only for a tank and a half of oil."

"These prices are shocking," said Pat Daly, executive director of the South Shore Community Action Council in Plymouth. "We have seen a huge increase in the number of people applying for assistance, people who never thought they would have to do it."

Daly said her agency serves many seniors, who have been particularly hard hit. She said some of her clients also use propane gas, which at times has cost even more than oil.

The fuel-assistance programs the agencies run combine federal and state funds and will provide about $140 million in assistance this heating season to between 130,000 and 140,000 clients statewide. The federal government released $40 million in emergency aid last week to 11 states, including Massachusetts, which is receiving an additional $5 million.

Strollo, whose agency serves 3,000 clients, and Daly, whose agency aids 8,500 families, welcome the money, but say it will not help those who have already exhausted their benefits.

"We are still accepting applications for this year," said Strollo. "The door hasn't closed if you need help."

But the door has closed at at least one fuel-assistance agency: Joe-4-Oil - or Joseph Kennedy's Citizens Energy Corporation, the nonprofit agency that leverages low-cost fuel from Citgo, the Venezuelan oil concern, is no longer accepting applications for this year.

"Due to the high demand for assistance, we have currently exhausted all our available resources for this program," says a message on the firm's website.

Those who do not qualify for state or federal help may get aid from the Massachusetts Good Neighbor Energy Fund. Energy firms, the Salvation Army, and private donors provide the money for the fund, which has raised more than $14.6 million and assisted nearly 69,000 families with a month's energy expense since its inception in 1985.

As low-income families use their grocery money to pay for heat, pantries at nonprofit agencies are also feeling the heat. Major Shirley Christiansen of the Salvation Army in Brockton said her food pantry is "always full," but she worries that energy prices are affecting her clients' abilities to hang on to their homes.

Daly said she has also seen a huge increase in requests for food and worries that many of her clients are resorting to using space heaters, creating a new set of problems.

Michael Ferrante, president of the Oilheat Council, which represents 350 of the roughly 800 fuel oil dealers in the state, said the constant price increases have left dealers exasperated. Ferrante said that while a weak dollar and increased demand from India and China are factors, unregulated speculation in the energy market is the biggest villain.

Ferrante said he has been surprised that in an election year, there has not been more talk about closing the so-called Enron loophole, regulations passed in 2000 that exempted energy commodity trading from federal oversight.

"Prices are about $20 to $25 per barrel higher than what the weather and demand would seem to indicate," he said. "We're shaking our heads over what's causing it. Supply has stayed steady and, weatherwise, it's been an average winter in terms of temperatures."

The outlook for price relief soon is bleak. Crude oil futures bolted past $103 a barrel on the New York Mercantile Exchange this week, and heating oil futures for March also hit a new high. That means the price of heating oil is expected to climb even more in future weeks.