American Consumers on short end of Energy stick
HAGERSTOWN, Md. - When James Schwartz signed a contract last summer locking in home heating oil for the winter at $2.79 a gallon, it seemed like a safe bet. Crude oil prices had surged and gasoline was above three bucks a gallon. Could $3 fuel oil be far behind?
But crude has dropped nearly 25 percent from its mid-July peak of $78.40 a barrel. And other heating-oil customers in the Baltimore area are paying as little $2.12 a gallon to heat their homes — 24 percent less than Schwartz is paying.
Schwartz, a 61-year-old social worker and retired Navy officer, learned a lesson about speculating on commodities, which is what he did by locking in a future price.
Customers often pay a premium_ about $40 a year in Schwartz’ case — to lock in a price. The contracts typically have cancellation clauses requiring customers to pay a penalty — about $100 in Schwartz’ case — to void the deal.
Schwartz, who lives with his wife and their cat in a three-bedroom, 2,400-square foot home about 15 miles west of Baltimore, said he decided after some calculations to stick with his fixed-price contract rather than pay the cancellation fee.
“If I buy out of it, I’m going to end up paying $140″ in contract fees he said. “It would take two and a half to three deliveries of oil for me to make up the difference.”
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This whole notion of “contracts” for consumables is an absolute fraud especially Cell phone contracts where they require two years and they get away with “automatically” renewing the contract if you make the slightest change or even call them with an issue.
It’s downright fraud and should not be tolerated by the American sheeple.
What’s next a contract to buy a certain amount of cereal at a certain price at the grocery store???
This says a lot about how well the U.S. is doing.
The Alaska Governor blames the citizens of course.
Oil rich Alaskans depend on Venezuela for Oil
About 150 native villages in Alaska have accepted money for heating oil from Citgo. The oil company does not operate in Alaska, so instead of sending oil, it is donating about $5.3 million to native nonprofit organizations to buy 100 gallons this winter for each of more than 12,000 households.
“When you have a dire need and it is a matter of survival for your people, it doesn’t matter where, what country, the gift or donation comes from,” said Virginia Commack, an elder in the arctic village of Ambler, an impoverished Eskimo community of 280 where residents are paying $7.25 a gallon for fuel.
“It’s embarrassing that residents in a state with so much oil wealth should be looking to a foreign nation for help,” the newspaper said. “It’s hard to blame villagers for accepting the gift.”
A spokesman for Gov. Frank Murkowski, John Manly, said the governor believes Chavez’s donation is a ploy to undermine Americans’ faith in their government. But he said it is up to each village to make its own decision.
“It seems like a very strange irony that we produce the oil and yet every year there seems to be a chronic problem in getting the fuel to people that need it,” Manly said.
Joan Eddy, principal and teacher at Nelson Lagoon’s school, said most buildings in town were erected 30 to 40 years ago, which makes them pretty old, considering how they get battered by the constant 20-25 mph wind coming off the ocean. Their heating systems are aging, too.
She noted the fuel barge is late arriving this year, and said residents are turning on their furnaces for only a few hours in the morning and at night.
“We’re conserving as much as we can because we are concerned. It looks like it’s going to be a snowy winter and cold,” she said.
Maine Gov. John Baldacci, who approved an agreement last winter to buy discounted oil, said he had no plans this year to seek a similar arrangement. In Boston, a City Council member wants a landmark Citgo sign near Fenway Park taken down and replaced with an American flag. In Florida, a lawmaker asked the state to cancel Citgo’s exclusive contract to sell fuel at turnpike service stations.
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There is obviously a big problem there in Alaska I wasn’t aware of.
Since there is such an infrastructure problem the area should be declared unsafe and unfit for human habitation.