The inability of two southern Maine oil dealers to serve their customers during the recent cold snap isn’t tied to larger industry issues, the treasurer of the Maine Energy Marketers Association said Friday.

Rather, the closure of Thibeault Energy in Brunswick and delivery backlogs at Yorkie Oil in Scarborough seem tied to specific business problems, said John Peters, president of Downeast Energy in Brunswick.

“There’s no shortage of propane or fuel oil,” he said.

The industry’s health is important because oil helps warm seven out of 10 homes in Maine. Peters’ comments came following a week in which snow and unusually cold weather have been testing the ability of oil dealers to keep up with demand, and as rising prices have been taxing the ability of customers to pay for fuel.

The average statewide price for heating oil has hit $3.23 a gallon, up a nickel from a week ago and up 29 cents since late December.

These market conditions were further complicated over the past week with the closing of Thibeault Energy, a family-run oil dealer.

Media reports indicated that the 84-year-old company had been struggling financially, and a message on the company’s answering machine confirmed the company was closing.

“We appreciate the customer support. … The reason we are closing is beyond our control,” said a woman on the recording.

In recent days, some Yorkie Oil customers complained of delivery delays and others said promised deliveries never arrived, sparking concerns that another Maine oil company might fold.

Yorkie Oil owner Mike Maietta told local media Thursday that the delays were due to high oil demand and the recent string of snowstorms, as well as staffing problems.

Both companies are members of the Maine Energy Marketers Association, which represents roughly 300 dealers in the state.

News coverage has led some customers to worry about their oil contracts, and to speculate that rising prices may be behind the problems at Thibeault and Yorkie. Peters dismissed that speculation.

State law requires oil dealers to secure at least 75 percent of the fuel oil or propane supply they sell to customers in a pre-buy contract.

That means they must either buy the fuel and store it, or purchase futures contracts on the New York Mercantile Exchange that lock in fuel at a specific price.

Consumers can help protect themselves by making sure their contracts with oil dealers state that they have access to the oil, Peters said. At Downeast, he said, the company’s policy is to buy fuel before selling it, and disclosing in its contract with customers that it has the product.

Peters stressed that he hasn’t spoken to Thibeault’s owners, but said it was his understanding that the company lost bank financing and the working capital to run the business.

Downeast, one of the state’s largest dealers, found itself involved in the Thibeault closure when Thibeault customers who couldn’t get fuel in subzero temperatures began calling other companies for help.

Working capital is always an issue for oil dealers in the winter. While some have the resources to get their oil supplies on credit, most smaller companies pay cash at the terminals. They then need to get the money from consumers, and when the economy is bad and people are late on payments, it creates a credit squeeze for oil dealers.

At the same time, a broken truck or a sick driver can reduce a small dealer’s ability to perform during a delivery crunch, Peters said.

“You have to have the capacity when the weather’s cold to serve the customer,” Peters said. 

Staff Writer Tux Turkel can be contacted at 791-6462 or at: tturkel@pressherald.com

 

Copy the Story Link