US heating oil dealers seek help amid cash crunch

By Haitham Haddadin

NEW YORK, March 14 (Reuters) - U.S. heating oil distributors said Friday they were seeking federal help to ease a cash crunch this winter caused by delayed payments from low-income customers and sky-high prices for their own fuel inventory.

The squeeze mirrors problems faced by dealers in 2004, when a run up in energy prices pushed the nation's leading heating oil distributor to the brink of bankruptcy.

"It's brutal," said Shane Sweet, CEO of the New England Fuel Institute (NEFI), which represents about 1,000 distributors and retailers in the northeastern states. He said customers occasionally ring their fuel dealers in tears over their heating bills.

"I was talking with heating oil dealers and gasoline station convenience store operators, and in terms of cost of fuel and the impact that it has to their operations, it's the worst year that most people can ever remember," Sweet said.

The average residential heating oil price paid by Americans surged to a record $3.68 per gallon this week, up more than 40 percent from a year ago, alongside a surge in the price of crude oil to all-time highs, according to government data.

Fuel retailer associations including NEFI, the New York Oil Heating Association and the Petroleum Marketers Association of America are considering sending a delegation to Congress to ask for an increase in funding for the Low Income Home Energy Assistance Program -- a program created in 1982 to help the poor pay for heat.

"We are asking Congress to release additional funds through the LIHEAP program to aid those who are having a hard time paying their energy bills," said John Maniscalco, executive vice president of NYOHA.

The U.S. Senate late on Thursday voted to double funding for the LIHEAP program to $5.1 billion for the 2009 budget year, which begins on Oct. 1, short of the immediate fix that the dealers were demanding.