No relief in sight for heating oil, gas customers

Kennebec Journal & Morning Sentinel

BY MEGHAN V. MALLOY
Staff Writer
03/12/2008


BY MEGHAN V. MALLOY

Staff Writer

The cost of home-heating and car fuel will hit Maine even harder this week, as two key fuel prices have reached record highs with no letup in sight.

Blame it on the high cost of crude oil, which closed at more than $108 a barrel on Tuesday, according to the New York Mercantile Exchange. Gas, meanwhile, hit a new national average of more than $3.22 a gallon.

"It's a little disturbing," said Pat Moody, of the AAA in Portland. And it could get worse.

"There are some realized costs that have to work their way through at the pump," he said.

A third milestone also was reached this week: Mainers' view of the state's economy has dropped to an all-time low.

The price of crude Tuesday closed at $108.67, after soaring to a new trading record of $109.72. The high price of crude pushed the cost of gasoline and heating oil to record numbers. The cost of a gallon of gasoline is substantially higher for Mainers, who pay at least a nickel above the national average, the AAA said last week.

How much more can we expect to pay?

"Anything from $3.50 to just under $4" per gallon, said Moody. "But most experts we work with agree we're in the last stage of this oil rally."

The new national average for gasoline is $3.2272 a gallon, which is just slightly higher than the record $3.2265 average that was reached in May 2007, according to AAA.

It also costs more to stay warm, causing many lower-income Mainers to be "in crisis" since October, said Dale McCormick, director of MaineHousing in Augusta.

"Prices started going up in July," she noted. "By October, we were paying 90 cents more than a year ago."

The Maine State Planning Office this week said Mainers are paying an average of $3.61 a gallon for heating oil, up 16 cents from one week ago.

MaineHousing has implemented several programs in recent years to help homeowners and renters with the rising costs of heating oil, and to help state residents make their homes more energy-efficient.

The agency helped 49,000 lower-income households with their heating costs during the 2005-2006 heating season as well as the 2006-2007 year. Eligible households must have an income at least 150 percent below the federal poverty line of income.

McCormick advises homeowners and renters to behave proactively during oil-price increases.

"Any money you can put into your home to stop heat from escaping will save money and pay for itself instantly," she said.

"We're all either paying more for oil, turning down the thermostat and putting ourselves in danger," she said, "or going without another necessity like food or medicine to pay" for oil.

With fuel costs creeping higher, it's no surprise that many Mainers feel pessimistic about the economy.

In a study released Tuesday, Market Decisions of Portland stated that 43 percent of Mainers surveyed believe they are worse off financially than they were a year ago.

Twenty-two percent believe that hard financial times will continue for them, and that they'll be worse off next year than they are now.

Meghan V. Malloy -- 623-3811 Ext. 431 or

mmalloy@centralmaine.com