June 30, 2008 Rising fuel costs and home heating worries Play video

(Peter Howe, NECN) - On a hot summer day, the only petroleum price most people are thinking about is a tank of gas, not a tank of home heating oil. But, even with months to go before winter, some are terrified about people covering the cost of staying warm.

“We've never seen a spike in oil as we have today, where the ability to buy a tank of oil exceeds the monthly income of most of our clients. I mean, that is something that is truly unprecedented, and we really don't know how people are going to cope with that.”

Action for Boston community development delivers federal heating assistance to people around Boston. But heating oil prices have almost doubled in the last year.

In Massachusetts oil now averages $4.59 a gallon. That's up from barely $2.50 in 2007 and 2006, and nearly triple the 2004 price. Heating oil is more volatile than gas because it's a niche fuel, used in barely two dozen U.S. states. The Massachusetts Oil Heat Council has no idea when, or if, oil ever goes below four dollars.

Ferrante: It's very hard to predict where we'll be in the fall. The hope is that some confluence of factors will come into play. OPEC will increase production, Congress will take some action on speculation in the market, and those will drive the prices down.

The huge runup in the price of fuel oil has more and more New Englanders looking at switching to natural gas, a strategy that does have its own risks, but for now, would save you a lot of

Gas utilities estimate the heat from $4.59 of oil, you can get from just $3.11 cents worth of gas. Since January, National Grid has switched more than a thousand Massachusetts and New Hampshire homes from oil to gas, 12 percent more than last year. Oil customers are swamping gas utilities with calls about switching.

“Certainly all energy sectors are going higher. Natural gas prices have climbed almost 30 percent over the last month or so. Converting to natural gas can cost almost $10,000 dollars, so you better be sure that investment is going to pay back.“

And as Hurricane Katrina showed, one big storm in the Gulf of Mexico and gas can jump 50 percent overnight. Still, ABCD doubts oil can drop enough to compete with gas by this fall.

“It would be an unprecedented drop in such a short period of time between now and November…”