Sanders wants more federal help
MONTPELIER — The federal government must deal with fuel prices that soared over $3 per gallon at some Vermont gas stations in the wake of Hurricane Katrina, according to Rep. Bernard Sanders, I-Vt.
Sanders, who met with Vermont fuel dealers, said at the Statehouse on Wednesday that more fuel should be released from the U.S. Strategic Petroleum Reserves and pressure should be put on Mideast nations to increase production and reduce costs.
Sanders called the decline in production of gasoline and particularly fuel oil a "national emergency" with winter bearing down on the Northeast.
It's "an emergency that the president and the U.S. Congress have got to address boldly," he said.
Unless the amount of federal money flowing the Low Income Home Energy Assistance Program is increased Vermonters and others will not be able to afford heating oil this winter, Sanders said.
Last year, about $2.2 billion was spent on LIHEAP. At least $4 billion will be needed this year just to keep up with the increase in fuel prices, Sanders said.
"Unless we substantially increase the funding for LIHEAP you are going to see a lot of people go cold in America," he said.
Not only oil drilling in the Gulf of Mexico was affected by the hurricane, said Sean Cota, a Bellows Falls fuel dealer and former president of the Vermont Fuel Dealers Association.
Pipelines that feed the country's energy needs, as well as 17 refineries along the Gulf Coast, were shut down by the storm.
"The worst thing customers (in Vermont) can do is go out right now and top off their (gas) tanks," Coda said. That will restrict the amount of gas available to emergency operations in the South.
Gasoline futures on the New York Mercantile Exchange jumped after the damage from Katrina became evident over the last few days.
"Now is the time to remind Saudi Arabia and Kuwait that it was America and American lives that protected their countries," Sanders said.
Congress must also investigate large gasoline corporations to make sure they are not price-gouging, Sanders said.
"Congress has got to take a close look at that," he said. "It's no great secret that the oil industry is making huge profits."
Cota and Shane Sweet, vice president of the Vermont Fuel Dealers Association, said Vermont dealers are not making more money on gas and heating fuel with the increase in cost, and may in fact be losing it with the volatility in the market.
"It's putting the dealers in a pinch," Sweet said.
One unknown is what the higher prices will do to heating oil dealers who have signed pre-buy contracts with customers locking in lower rates. If dealers prepared for price increases when they signed those deals they should be able to honor them, Cota said.
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