Fuel oil industry
faces high fixed rates
Nov 11, 2008 12:52 PM
The New England Fuel Institute (NEFI) and New England fuel oil dealers are seeking a meeting with the federal government after many customers opted to sign up for fixed rates when the cost of the product skyrocketed through mid-July, according to NEFI information.
As a result of the market situation, the customers are locked into their rates because of their decisions to choose fixed prices and the retailers are locked into their costs because of purchasing the fuel at the summer's high prices. Retailers are required to have the necessary fuel supply on hand if they offer fixed prices.
The group sent a letter to the Treasury Secretary to consider using its "array of significant new powers afforded it by the Emergency Economic Stabilization Act (commonly known as the Wall Street bailout package) to facilitate the access to capital [the industry] needs on behalf of the nationís heating consumers," according to the NEFI information published in NEON, the institute's weekly e-newsletter.
The letter to Treasury Secretary Henry Paulson points out that in addition to the price hikes, Goldman Sachs and others investment banks were "scaring businesses and consumers with predictions that crude oil would top $200 by winter, and with it even pricier heating fuels. Of course, the price run-up never occurred, due in large part to the Wall Street collapse and the subsequent exodus of speculative capital from the commodities markets," the group stated in its letter.
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