updated 9/11/2005 6:50:53 PM ET 2005-09-11T22:50:53

Richard F. Smith tried to prepare for high heating oil prices: He applied for home heating assistance, he’s ready to seal off three unused rooms, and he has insulated his cellar and electrical outlets.

Despite all that, the 75-year-old expects to dip into his life savings to keep warm this winter, even with federal heating assistance.

“People are concerned,” said Smith, who lives alone with his cat Sam in a seven-room house built in 1820.

With fuel prices surging because of Hurricane Katrina, there are no guarantees heating oil won’t hit an unprecedented $3 a gallon. Last year’s average of $1.95 per gallon in Maine was already enough to make customers wince.

And officials worry that federal heating assistance for the poor will fall short of what’s necessary to keep people warm.

“Three-dollar-a-gallon gasoline is an inconvenience and a hardship. Three-dollar-a-gallon heating oil is life or death,” said Beth Nagusky, director of Maine’s Office of Energy Independence and Security.

A bigger proportion of homes in New England use oil for heat than in any other region of the country because of its older housing stock and the late arrival of access to natural gas to many parts of the region, according to Jonathan Cogan of the Energy Information Administration in Washington. The portion of homes using oil ranges from 70 percent in Maine to 39 percent in Massachusetts.

Many residents avoided the sting of high oil prices during last winter’s bitter cold by buying contracts that locked in prices early.

This summer, with prices already high, many people paid around $2 a gallon for contracts for this winter. Then Katrina hit the Gulf Coast, knocking out oil supplies and refineries and sending gasoline prices surging.

Heating oil prices spiked, as well, even though there’s a greater supply of heating oil than in the past six or seven years, Nagusky said.

“It was a good thing for the oil companies. They relish this. It is an excuse, an excuse, to up it,” said Smith, a widower who used to own a small grocery store, Smitty’s, in Auburn. “There’s no stopping it, and it’s a shame.”

Smith paid $1.89 per gallon to top off his 275-gallon tank this summer. Since then, the average price has climbed to about $2.50 a gallon in Maine.

New Hampshire’s average price was $2.67, a jump of 23 percent in a month and 65 percent in a year, said Joe Broyles of the state Office of Energy and Planning.

The last resort for people who cannot pay to keep warm is federal heating assistance, but how much heating aid there will be this winter remains uncertain.

There are not a lot of options. Firewood prices have shot up to roughly $200 a cord in Maine, about $75 more than last year. Natural gas prices are up, too.

In Haverill, Mass., Rocco Pelosi, 78, has piled up firewood in his 1.5-acre backyard. That will help some, along with federal assistance. Without it, he’s not sure what he and his wife would do.

“I don’t want to cry on anybody’s shoulder,” he said. “I try to make ends meet.”

Smith’s backup plan also involves firewood. He has an extra bed set up next to his fireplace, and he’ll sleep in it if he has to.

“I’ll block off the room with the fireplace. I’ll close it right off,” he said.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com