Faced with dramatically rising heating oil prices already 50 percent higher than last year, the Carter administration is now considering between $1 billion and $2 billion in relief for middle-income households using that fuel, administration sources said yesterday.
The assistance would be in the form of either direct tax credits or rebates from jobbers to consumers, with the jobbers eventually being reimbursed by the government.
Such assistance would be in addition to already-proposed help for low-income families, expected to be hardest hit by the fuel oil price rise. Heating oil is used in one quarter of all homes in the United States.
The discussion over extending relief to middle income families has caused a brouhaha in the administration, one source said.While the domestic policy staff favors such a move, the Treasury Department and the Council of Economic Advisers oppose it. The Energy Department has not come down on either side.
This activity comes as the administration is reporting that, for the first time this year, stocks of middle distillates, which include heating oil, are higher than they were at the same time last year.
Industry and administration analysts say this virtually assures adequate supplies of heating oil in the United States this year, barring any disruption in worldwide crude oil production.
And in another development, Texaco Inc., one of the nation's largest heating oil suppliers, serving 190,000 customers through 2,100 wholesalers in 42 states -- 7 percent of the national market -- yesterday said it will try to hold home heating oil prices at their current level through the winter.
Texaco also said it would be modifying its credit policies to make it easier for wholesale and retail customers to pay their bills, which will be considerably higher than last year's.
DOE figures show that the average price of heating oil has risen from about 53.7 cents per gallon in January to well over 80 cents a gallon today.
Much of that increase is due to the rapidly increasing cost of crude oil. The cost of crude is expected to continue to rise because the Carter administration began lifting price controls on domestic crude oil in June. The controls will be virtually eliminated by January.
To offset the increasing costs, the administration has revealed plans to expand upon existing assistance programs to low-income households using heating oil.
Still, the administration faces continuing political pressure to broaden assistance programs, particularly in New England, where between 60 and 70 percent of the households use heating oil.
For that reason, administration sources say Carter may choose a speech he plans to make to elderly people in Hartford, Conn., Wednesday as a forum to unveil further assistance programs.
Sources say one of the plans would offer tax rebates that would be phased out somewhere in the income range of $20,000 to $30,000.
Sen. Harrison A. Williams Jr. (D.-N.J.), chairman of the Senate Labor and Human Resources Committee, yesterday introduced legislation that would provide $6.6 billion in federal aid over five years to help families pay their heating oil bills, adding more pressure on the administration to up the ante on its relief programs.
Several other programs aimed at heating oil relief have been proposed in Congress.
The administration has also been jawboning the oil industry to keep prices down. In congressional testimony earlier this week, Deputy Energy Secretary John O'Leary warned that price controls on heating oil could be imposed if the Energy Department determines that the oil companies have unfairly boosted profits at the same time prices were already rising at record levels.
The DOE figures showed that while rising crude costs were a major component of the increased costs of heating oil, refiners had also increased their margins substantially.
Oil industry spokesmen defended their profit boosts by saying they had been making insufficient profits on home heating oil in the past, and that this was the first opportunity in two years that they had to increase their profits to adequate levels.