The cost of home heating oil in the Washington area has soared nearly 15 percent during the past four months to the highest levels in memory, industry sources say.
A typical homeowner here using oil at its new high cost would now pay an average heating bill of about $146 a month during winter -- an increase of about $21 a month over the old rates -- according to figures supplied by Leonard P. Steuart II, president of Steuart Petroleum Co. here.
Steuart and other industry sources said yesterday that No. 2 home heating oil used in 180,000 residences here now sells for 55 to 59 cents a gallon, up from about 48 cents a gallon at the beginning of the heating season in November.
Number 6 commercial heating oil -- used in apartments, offices, schools, hospitals and other large buildings -- now costs about 42 cents a gallon here, up about 6 cents from November, the sources said.
The cost rise here is part of a national trend caused by the Iranian oil cutoff and tight world-wide oil supplies, particularly cold weather this year, and an unexplained, abnormally high national gasoline consumption last fall that prevented major oil suppliers from building their home heating oil stocks as they normally do at that time of year, the industry sources said.
The price of home heating oil was decontrolled by the federal government a year ago. The price of gasoline remains under federal price controls.
Steuart said that oil remains a cheaper home heating source than electricity even with the price increase, although gas remains cheapest of all. Oil is burned to produce electricity in some generating plants.
Although prices have shot up, the tight supplies have not meant any significant curtailment of home heating oil deliveries to consumers, according to local and national oil company executives.
However, last week's major snow-storm severely disrupted deliveries of home heating oil in the Washington area. Oil companies worked around the clock to make deliveries, but many people went without oil for days when their tanks ran out.
Jim Windsor of the Oil Heat Association of Greater Washington said yesterday that oil has now been supplied to nearly everyone who needs it with the exception of some who live in isolated areas.
Several people who called The Washington Post said they just received oil in the past day or two. Catherine Milner said her four-unit building at 1901 Constitution Ave. NE remained without heat yesterday after 10 days in that condition.
Milner said there was oil in her tank but that the furnace stopped working. She said she has a service contract with Griffith Consumers, the largest home heating oil supplier in the Washington area, but that Griffith failed to service her furnace.
"The bills have been paid. They're paid regularly," Milner said. "I called them. They said they would be out. I made 25 calls. Nobody has come. They keep saying somebody's on the way."
Nobody answered the Griffith business number yesterday when a reporter called. Griffith President Pierce MacNair could not be reached at his home yesterday.Last week, McNair refused to talk to a reporter, saying through a secretary that he was too busy dealing with the crisis.
The crisis gave rise to complaints that local oil suppliers were favoring some customers over others, but company executives said yesterday it was natural for them to favor their regular customers.
"Our regular customers are our first priority," said Nelson B. Woodson, president of A.P. Woodson Co., second largest home heating oil supplier in the Washington area. "We're certainly not going out and service someone else's customers in this weather."
Woodson said he has 14,000 customers in the area. Sixty percent of these customers also have service contracts with the company, he said.
These contracts are an agreement by the company that it will send servicemen at any time to repair a customer's furnace. The customer pays an annual fee for the service.
On top of this, the customer pays for oil at Woodson's current rate of 57.5 cents a gallon for tanks of 1,000 gallons or more, and 58.5 cents for smaller tanks. Most home tanks are of the smaller variety.
The price can change at any time. Woodson and other companies generally do not guarantee a steady price when they take on a steady customer.
Woodson said that when price increases hit his company from its suppliers, they are mostly passed on to the consumers. He said his company is trying to maintain its same percentage profit margin, but that this is difficult and the margin has decreased slightly recently.
Ninety-three percent of Woodson's customers receive oil deliveries automatically. The company keeps track of when deliveries were made, then estimates when another delivery is needed based on how fast the furnace burns oil and on how cold the weather is.
Most other area oil suppliers work the same way, according to Woodson and the other executives. The way they deliver and choose who will receive priority deliveries is not regulated by government except in the case of officially declared emergencies.
Woodson said the other 7 percent of his customers are served on an "on call" basis. Oil deliveries to them are not automatic, but are made when the customer calls and requests a delivery. It normally takes two or three days from the call until time of delivery.
Some of these "will call" customers are steady, but others call various companies looking for lower prices or quick deliveries.
"It's sort of an unwritten rule that a steady customer is going to be favored over a guy who calls up and says, 'Hey, I need some oil,'" said Windsor, the oil association man.
Windsor said that at a typical oil supply company, every morning the dispatcher will hand each oil truck driver a batch of delivery orders, indicating the "priority and urgency" of each. The old and sick might get a priority, for example. Also, Windsor said, a customer's "steadiness and credit rating" would be taken into account by the dispatcher.
Steuart said the average customer uses 1,500 gallons of oil a year. The price usually begins low in November, rises to a peak during the peak-use month of January, then dips again by summer.
But there may not be much of a price dip this spring and summer if crude oil supplies worldwide remain tight, Steuart said.
"The warm weather is a godsend to us at the moment," Steuart said. Continued cold weather could mean that tight supplies of home heating oil would result in actual shortages for consumers, according to the industry sources.