Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 6, 1993 TAG: 9311060085
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Medium
Both nationally and around Roanoke, home heating oil appears to be in ample supply at a price below a year ago.
Fuel oil distributors surveyed this week said they expect no problems in this season's supply unless the region experiences an unexpected harsh winter.
"We see no problem at all with supplies with the contracts we have and with the commitments we have" from suppliers, said Ron Lundy, president of APB/Whiting Oil Co. in Roanoke.
Residential use of fuel oil for home heating ranges from 17 percent in Salem to 53 percent in Bedford, according to U.S. Census figures. Fuel oil use tends to be higher in localities without a natural gas utility.
The oil companies said calls for residential deliveries have picked up markedly with the recent cold snap. "They generally wait until the last min- ute," said Tim Shelton, who manages fuel oil deliveries for Fuel Oil and Equipment Co. in Roanoke.
But that kind of consumer behavior is nothing new, said Frank Hatcher of F.L. Hatcher and Son Inc. of Roanoke. When it first turns cold, calls for deliveries triple, he said.
Hatcher said the weak economy has prompted his customers to buy their oil in smaller quantities. That causes him some concern, because he has to make more deliveries to the same number of customers.
Prices for No. 2 fuel oil, the most common type of home heating oil, are down 7 percent from this time last year, Lundy said. No. 2 oil was selling this week in the Roanoke Valley from 88.9 cents to 89.9 cents per gallon.
That's considerably lower than the U.S. Department of Energy's nationwide projection for No. 2 fuel oil prices this winter: 99 cents per gallon. But it is in line with the statewide average price during the week of Oct. 18: 89.4 cents a gallon.
John W. Kirk III, president of Fuel Oil & Equipment, said he's concerned that a change in the way one type of fuel oil is taxed could cause a government-created shortage of home heating fuel if the winter is especially severe.
Federal law that takes effect Jan. 1 changes the collection point for the 24.4 cent federal transportation tax on each gallon of low-sulfur No. 2 fuel oil, which is used primarily in diesel trucks. Instead of collecting the tax when they sell the fuel to consumers, fuel oil dealers will have to pay it when they pick up fuel from their suppliers.
Kirk said he thinks the effective date for the change in the tax collection should be delayed at least through this heating season.
"Without this delay, we are running the risk of people freezing to death in a severe winter storm," Kirk wrote Rep. Bob Goodlatte, R-Roanoke, asking him to sign onto a bill that would delay the change.
The Department of Energy predicts winter temperatures in the Northeast and mid-Atlantic to be 1.3 percent milder this winter than last. Nationwide, however, the winter is expected to be slightly colder than normal, boosting fuel oil demand by about 4 percent.
The Journal of Commerce contributed to this story.
by CNB