Walter M. Murphy, 61, a retired president of area fuel companies who had been engaged in land development projects in Virginia and Pennsylvania for the past three years, died Aug. 29 in a hospital in Latrobe, Pa., after a heart attack. A resident of Vienna, he was staying at his summer home in Ligonier, Pa., when he was stricken.

Mr. Murphy was a native of Greensburg, Pa. He moved here in 1939. He attended George Washington University and served with the merchant marine during World War II.

He worked for the old Brooklyn Co., a Washington heating oil and building supplies concern, for 15 years, and was its vice president before founding his own corporation, the old Capitol Fuel Co. He sold Capitol in 1965 when he acquired the Vienna Fuel Co. He was president of the firm until 1979, when he retired.

Mr. Murphy was a member of Our Lady of Good Counsel Catholic Church in Vienna. His professional memberships included the Oil Heat Institute of Washington and the Suburban Maryland Home Builders Association.

His wife, Lorraine, died in 1979.

Survivors include a son, William of Vienna; two daughters, Mary M. DeLong of Reston, and Janet L. Law of Vienna, and three brothers, three sisters and four grandchildren.