Fuel oil prices on the rise
11/01/07 5:51PM By John Dillon
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(Host) Fuel oil prices are expected to exceed $3 a gallon this winter. That's up almost 20 percent from a year ago.
Congressman Peter Welch blames some of the price increase on speculation in the energy markets. He's introduced a bill that would restore government control over these markets.
VPR's John Dillon reports:
(Dillon) As the director of an anti-poverty agency in Chittenden County, Tim Searles keeps a close watch on fuel prices. He knows that as prices climb, more people will need help to keep their homes and apartments warm.
In Vermont, 25,000 people get help from the government to pay their heating bills. Searles says with prices reaching $3 a gallon, those programs are under strain. And he says people are forced to make the choice between heating their homes, buying food or paying the rent.
(Searles) We've seen an 18 cent increase in the price of fuel just in the month of October. What we are allowing to happen here is one of basic needs -like housing, food and warmth - is being priced out of the affordability range of a significant and growing number of people in the state of Vermont and across the country.
(Dillon) Searles supports a bill introduced by Congressman Peter Welch that's aimed at restoring government oversight of the energy markets.
The electronic trading in fuel market was de-regulated in 2000. But Welch says speculators are now cashing in. He says speculation and market manipulation is costing Vermont consumers an extra $800 to $1,000 a year.
(Welch) With total deregulation of some of these energy markets, it's allowing the speculators to drive up the price, control the price, make obscene profits, line their pockets by emptying the pockets of families in Vermont, and New Jersey and across the country.
(Dillon) Welch is co-sponsoring his bill with a congressman from New Jersey. Welch says the legislation would return regulatory power over energy to the Commodity Futures Trading Commission.
Sean Cota is a fuel oil dealer in Bellows Falls. He says consumers get hurt when the market is dominated by hedge funds and other speculators.
(Cota) The impact on the consumer is dramatic. The percentages of increases that you've seen in energy commodities - all energy commodities - have been out of sight. That's where the play in the market has occurred.
(Dillon) Welch's bill is before the House Agriculture Committee. Similar legislation is pending in the Senate.
For VPR News, I'm John Dillon in Montpelier.
AP Photo/Toby Talbot