Published in the Current
Local oil dealers say fear about a war with Iraq may drive oil prices up a bit in the short term, but there is plenty of oil to go around and prices will stabilize.
Jeff Quirk of Quirk Oil Company in Scarborough said prices may be going up slightly right now, but are generally stable.
Last year, people thought oil prices would climb after Sept. 11, but they did not. Quirk expects similar psychological factors this year to contribute to oil price uncertainty.
Kevin Frederick of Frederick Brothers Oil in Scarborough said, “nobody knows for certain what it’s going to do.”
He said military action in Iraq could cause prices to rise initially, but that would be because of public concern and not any real issue with the oil supply.
Those price hikes may be artificial to some degree, reflecting refineries’ desire to make a profit from public concern rather than decreased oil supply, dealers said.
Buyers may not have a wide range of prices to choose from.
“Most all of us buy from the same supplier or suppliers,” Quirk said.
Local dealers don’t hike their prices “unless they have to,” Frederick said. And when they do raise prices, they don’t always pass on the full increase to customers.
Small dealers, he said, will often handle a five-cent supplier-price increase by raising their own prices two or three cents and absorbing the rest as a reduction in profit.
Bill Fielding Jr. of Fielding’s Oil Company in Scarborough said his customers are also worried, and prices have climbed slowly for the past two months. He has had some calls from people who want to pre-buy oil to lock in a price, even if they might not normally do so.
Fielding cautioned that those people are taking a risk: If oil prices go down, they might have spent more money than they would need to.
Michael Constantine of Champion Fuel Company in Cape Elizabeth said his customers are worried about what war might mean for oil prices, but there is plenty of oil in reserve. Homeowners may have a lot of oil already in their
tanks, because of warm temperatures last year, while oil companies have thousands of gallons in their tanks already because they sold so little oil last winter.
“I don’t see that there’s going to be a problem for anybody,” Constantine said.