CT Stops Oil Dealers’ LIHEAP Boycott

Connecticut’s Attorney General Richard Blumenthal announced an agreement December 3 with the Independent Connecticut Petroleum Association (ICPA) that bars the oil dealers from boycotting the state’s LIHEAP.

An investigation by Blumenthal's office revealed that the ICPA attempted to instigate a boycott of the Connecticut Energy Assistance Program (CEAP) for the 2007-2008 heating oil season at its annual chapter meetings last year.

As a result of ICPA's activities, certain heating oil dealers elected not to participate in the CEAP for the 2007-2008 season, Blumenthal said, and others delayed signing on in order to pressure the state to raise the rate of LIHEAP funding reimbursement for fuel oil dealers.

Connecticut, like most Northeast states, leverages its LIHEAP funds by negotiating with vendors  on behalf of LIHEAP households for reduced rates for deliverable fuels such as heating oil.  Since the early 1990’s,  the LIHEAP office has operated a statewide Fixed Margin Pricing Program under which vendors delivering oil and/or kerosene to LIHEAP households are paid based on the daily Oil Price Information Service standard prices  plus a fixed margin of 31 cents per gallon, or the vendor’s normal retail price, whichever is lower.  Connecticut has periodically adjusted the fixed margin to reflect fuel costs and vendor program costs.  ICPA members said the 31-cent margin was not high enough to cover their transportation and other costs, according to news articles from October of 2007.

On average, the fixed margin program has saved Connecticut’s LIHEAP households about $1.5 million per year, according to state leveraging reports.

The ICPA denied it violated state and federal antitrust law, as the attorney general has alleged, but agreed to an Assurance of Voluntary Compliance, barring its members from conspiring to boycott state assistance programs or raise reimbursement rates. It has agreed to implement an antitrust compliance and training program to ensure that its leadership and members comply with state antitrust and consumer protection laws.

Source: AG office, CT state plan and reports

Page Last Updated: December 5, 2008