Higher prices for heat hit home on Whidbey
July 3, 2008 · Updated 5:11 PM
"Keeping warm this winter is going to cost more. No ifs, ands or buts about it.Responding to the rapid rise in petroleum prices during the past year, local propane and heating oil companies have given up trying to have cheery or hopeful news for their customers. A gallon of propane costs about 30 cents more now than it did at this time last year. A gallon of heating oil is 50 cents more. And, said officials from Northern Energy, Corey Oil and Whidbey Oil Sales this week, prices are more likely to go up than to come down.I think we'll see some increases, said Northern Energy branch manager David Jacober Monday.Jacober's company, which is based in Snohomish County, has seen the wholesale price it pays for propane rise 32 cents this year. That is bad news for Whidbey Island residents, because thousands of island households and businesses rely on the gas for heating, cooking and other needs. Even though Northern Energy tried to give its customers a break last summer by reducing its profit margin by 5 cents a gallon, locals will still have to pay at least $1.30 a gallon for propane this winter. That's up from about $1 a gallon last year.Jacober said his company has cut its prices as much as it can. Now it is up to consumers to bear the burden.I anticipate that people will have to cut back, he said. Part of that decision-making process may be to decrease the thermostat two or three degrees or to put on a sweater.Consumers will suffer a double hit this winter, said Nathan Corey at Freeland's Corey Oil. During the past year, gasoline prices have jumped even faster than propane and fuel oil prices. Prices on the island for gasoline have risen as high as $1.99 for premium fuel. Figures like that, Corey said, will have some people choosing between heating their homes and having transportation.At this point, Corey said he does not know how high prices will go.I don't know where we stand right now, Corey said. The picture for the outlook is pretty bleak.Propane consumers are not the only people taking a big hit with the higher gas prices. Like Northern Energy, Corey Oil feels the bite too, Corey said.Nobody likes higher prices, he said. They squeeze the margins for us.While filling propane tanks Monday, Corey Oil truck driver Lee Eygabroad said he is still making the same number of deliveries he has for the past year. But he knows that high prices will affect his customers this winter. And there are many propane customers on South Whidbey. Dozens of times a day, from Scatchet Head to Honeymoon Bay Road, Eygabroad can be found pulling a long, black hose from his truck to the side or around back of someone's home to fill propane tanks. Now, at the end of summer, customers are starting to fill up again. How many times they will fill up during the coming months is anyone's guess, said Nathan Corey. So far, his company has received only a few price complaints.At present, there is nothing on the horizon that will reduce petroleum prices or even bring them down. In the past month, the price for a barrel of oil has dropped by $3, thanks to increased oil production in OPEC nations. Last week, the federal government began releasing 2.8 million barrels of oil from its strategic reserves. So far, the price at the propane tank farms and at the pump has not dropped.Whidbey Oil Sales owner Sundown Bova said his Freeland company is still reeling from the increase in its main commodity, fuel oil. Two years ago wholesale oil prices were one-fifth of what they are now. That meant a better deal for consumers and a higher profit margin for oil companies like Whidbey Oil Sales.Northern Energy's Jacober thinks about this figure in different terms.We're paying more for the product now than we were charging our customers four months ago, he said.For his customers' sake, he hopes the prices will come down. But it may be that people living in the United States will have to get used to paying the prices Europeans have for years. That will be a difficult adjustment, Nathan Corey said, especially this winter.I really feel for those on fixed incomes. "