Heating oil prices hitting record highs, topping $6 a gallon in some cases

Home heating oil prices are setting records on Long Island and throughout the state, with some dealers reporting prices topping $6 per gallon this week after setting decades-old records this winter.

For the week of April 25, average heating oil prices on Long Island hit $5.50 a gallon, according to the New York State Energy Research and Development Authority, a 74% increase from the $3.16-a-gallon price of a year ago.

The late-April high marked the latest in a string of high prices through the winter and spring, brought on by a volatile crude oil market spurred by Russia’s invasion of Ukraine and other geopolitical and supply factors. Statewide prices hit $5.34 a gallon for the week.

But customers across Long Island are seeing even larger bills as a spring cold snap prompts some to top off oil tanks. Nick Del Vecchio, president of Frank Bros., a heating oil company in Bay Shore, said prices this week ranged between $6.29 and $6.39 a gallon, before settling in at $6.35 today. The prices at which he buys oil, he said, have never been higher.

“Wholesale prices are just crazy,” he said, noting profit margins on oil deliveries are thinner than ever, both on a percentage basis and on a cents per gallon. “I was making more selling people oil at $3.50 a gallon.”

One of the reasons is that cash-squeezed customers are buying oil in much smaller quantities than before, making it more expensive to deliver. And late- or nonpaying customers can take a bigger hit on overall profitability. Wholesalers aren’t storing large quantities of oil, Del Vecchio said, because of concerns of having too much inventory at record high prices as the heating season, and demand, tapers off.

For customers paying the highest prices, the sting is much worse.

“We’d love to see things turn around because consumers need relief,” said Rocco Lacertosa, chief executive of the New York State Energy Coalition, an industry association. “Customers are going to have problems paying bills all summer long.”

“It’s really tough for families,” Del Vecchio added, as well as dealers. “An oil bill that used to be $700 is now $1,200. And every other cost has gone up — insurance, food.”

It's not just heating oil that's impacted by the increases. As Newsday reported Tuesday, gasoline prices have also broken records in recent days, and the cost of diesel fuel is rising apace. Riverhead fisherman Phil Karlin said he recently paid $6.30 per gallon for diesel to fill his North Fork trawler. It's forced him to cut down his fishing days. "It doesn't pay for the amount of fuel I burn," he said. 

Some customers who locked in heating oil rates last fall at $3-plus a gallon are now coming off their contracts and experiencing sticker shock. For those customers, Del Vecchio advises, “don’t lock in right now. If you lock in now and the price drops $1.50 in four months, it’s really difficult.”

Lacertosa said his coalition is working to encourage Congress to provide more heating assistance to struggling customers while urging lawmakers to open up oil exploration and drilling. He said oil delivery companies aren’t basking in the high prices.

“We’re not big oil, we’re multigenerational family businesses, like the coffee-shop owner on the corner,” he said. “We don’t control the prices. We can’t correct this situation tomorrow. … We’re just the guys that deliver the product and are somewhat at the mercy of the market.”

Lacertosa said one positive note is that the highest prices have arrived just as the heating season is coming to a close. /

“It’s somewhat of a blessing that this didn’t happen in December,” he said. “We’re coming out of the season and there will be less and less demand. People will conserve so they don’t have to fill their tanks.”

Wholesale prices have moderated a little from earlier highs, Lacertosa added. “But we still have a long way to go before we get back to whatever you call normal.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.