Tony Wong and Sharda Prashad
October 9, 2004
Radcliffe Robinson isn’t looking forward to heating his home this winter.
Robinson, 38, and his wife Patricia, moved into a three-bedroom house in Whitby in January, just in time for one of the more dramatic oil-price upswings in recent history. When the Robinsons purchased their home, the price of light crude was around $33 (U.S.) a barrel; it closed yesterday at $53.31. That increase has paced a jump in heating oil from about 52 cents a litre at the end of last year to 64 cents today.
“This is just about the worst time for something like this to happen,” said Robinson. “You reach a point where you end up having to seriously juggle the bills.”
Even those who heat with natural gas face increases of up to 40 per cent this winter, according to some estimates.
Tom Adams of Energy Probe, a national consumer and environmental research organization, estimates that more than 3 million of Ontario’s 4.7 million households heat with gas.
It is overwhelmingly prevalent in urban areas, but rural residents are more likely to feel the pinch as oil prices rocket, Adams said.
Ted Garner, petroleum manager at The Sarjeant Co. Ltd., which serves more than 4,000 heating oil customers in Simcoe County, said he has been getting calls from concerned clients.
“They don’t want a big bill in the middle of the month, so we’ve been trying to spread it out for them,” he said. Although crude oil prices have gone up by more than 60 per cent since the beginning of the year, Garner says his company has tried to keep a lid on escalating prices.
“Our margins are a lot thinner, and we share the pain because I have to walk down the street and look these people in the eye every day,” Garner said.
The bill for an average 1,400-square-foot, three-bedroom house should be about $1,400 this year, around $200 more than last year, Garner said. Since he recently renovated and added insulation, Garner hopes that his own bill will be about $1,300 this year, up just $100.
Susan Watson, office manager at Air Plus Heating and Cooling in Scarborough, said that the company had four contracts to convert from oil to natural gas last week alone because customers were concerned about higher energy costs. The company’s service manager recently converted his own home from oil to natural gas in the summer, Watson said. “I think there is a real concern out there. We are extremely busy.”
Rita Marshall took possession of a home in south Etobicoke home in July. A condition of the sale was that the seller fill the oil tank, so Marshall has no idea of the cost of a refill.
“We’ve got this huge oil tank in the basement, and I’ve been kind of dreading calling the supplier to figure out how much it’s going to cost to fill it up once it’s finished,” she said. “We haven’t started it up yet, but we’re not looking forward to it.”
It’s not just the heating oil prices that pose a problem for consumers. Soaring crude prices mean double trouble for Robinson, who started a business importing salted cod from the East Coast this year for distribution in Toronto.
“It’s not just about heating your home. It’s also driving your car. After paying for gas, it really eats into any profits,” he said. “Something like this affects you on every level.”
Robinson said he filled his tank Thursday at 79 cents a litre. By Friday, prices had jumped to 83.5 cents at his local station.
According to Michael Ervin, petroleum analyst at a Calgary research firm, a rule of thumb in the industry is that every $1 rise in the cost of crude oil translates into another cent at the pump. Gasoline prices averaged 74.5 cents per litre last September in Toronto, compared with 83.9 cents this September, according to Ervin’s figures.
Robinson is hoping for a mild winter so he won’t have to turn up his thermostat. He already feels “lucky” that the summer was cooler than normal.
“I think I only used my air conditioner on two days, and one of those days was to test it to see if it was working,” he said.
Vincent Muia, the owner of Dominion Insulation Inc., has been in business for 32 years and says that while demand is steady, it does increase when there is an energy crisis.
Insulation is “the single most cost effective thing you can do to your house,” he said, noting that homeowners who invested $150 to $200 on insulation 25 years ago cut their fuel costs by 10 to 15 per cent a year, resulting in accrued savings of $20,000 to $30,000.