Chavez's free heating oil program on hold

Sinking oil prices force firm to re-evaluate

January 5, 2009 

The program that gives roughly two months of free heating oil to families in rural Alaska each year is on hold, and nonprofits say they don't know how long the freeze will last.

Over the past two years, Venezuela President Hugo Chavez gave village families more than $16 million worth of heating fuel through his country's government-owned oil company, Citgo Petroleum. In November, a Citgo official told the Alaska Inter-Tribal Council it expected to continue the program this winter.

He may have spoken to soon.

Citizens Energy, the Boston-based nonprofit that oversees the program, announced Monday that the free fuel is on hold as Citgo tries to recover from sinking oil prices and a wounded world economy.

"Citgo has been forced to re-evaluate all their social programs, including the heating oil program," Citizens Energy President Joe Kennedy said on the group's Web site.

Oil prices have dropped about 70 percent since record highs in July. It's unclear when, or if, the program will re-start. It provided 100 gallons of heating fuel to eligible households.

A proud socialist, Chavez is a frequent critic of capitalism and of the United States. He once called President Bush "the devil" before the United Nations.

As a result, the free fuel always came with political baggage, and some villages refused to take it.

Politics aside, Monday's announcement arrived amid a punishing cold snap and painful fuel prices. It is rotten news for villagers who were counting on hundreds of dollars of free heating oil to offset the winter's crippling fuel costs.

People were skeptical of the free fuel program when it began, but it soon became a welcome relief, said Julie Kitka, president of the Alaska Federation of Natives.

Between high energy costs and low temperatures, the number of Alaskans asking about the free heating oil increased nearly tenfold this winter, said Steven Osborne, executive director of the Alaska Inter-Tribal Council.

"This is the year we need it the most. The temperatures are extremely cold out in these villages and we've been receiving hundreds of calls," he said.

$10 million benefit

As for what happens next, Osborne said the Inter-Tribal Council -- which manages the fuel program in Alaska -- is waiting to hear from Citgo itself.

"We're still in the holding pattern, we haven't heard anything official," he said.

The gift was available to anyone who lived in a community that is more than 70 percent Alaska Native, according to the Inter-Tribal Council.

While fuel prices have dropped in Alaska's cities, costs remain high in many villages, where fuel was purchased months ago and shipped in by barge. This year, the program would have cost Citgo about $10 million to buy 100 gallons for each eligible Alaska household, Osborne said.

That's roughly $1.5 million more than the fuel cost last year, according to the council's figures.

For the 56 Western Alaska tribes represented by the Association of Village Council Presidents, village heating fuel costs as much as $8 a gallon, said acting vice president Patrick Samson.

The Citgo program provided enough heating oil to last up to two winter months, he said.

"Right now we're battling no running water and cold and frozen pipes and 40 below windchill."

no signal from citgo

In Sleetmute, where a gallon of heating fuel costs as much as $7.75 per gallon, people are increasingly turning to wood stoves for heat, said Bambi Hill, who runs a local lodge, store and fuel business with her husband.

The recent cold spell kept mail planes from reaching the village for nearly a week, she said.

A Citgo spokesman declined to comment on the heating oil program Monday.

The company's options range from resuming the program, scaling it back or scrapping it.

"We've received absolutely no signal from Citgo other than it's been suspended indefinitely while being re-evaluated," said Brian O'Connor, a spokesman for Citizens Energy.

Find Kyle Hopkins online at adn.com/contact/khopkins or call him at 257-4334.

Anchorage Daily News is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service