Citizens Energy and CITGO providing discounted heat

Virgil Wright

PHILADELPHIA — Geraldine “Geri” Shields, a disabled grandmother trying to scrape by on Social Security, didn’t have much of a Christmas this year.

“I didn’t even go into the stores,” said Shields. “What money I had went to pay the gas and electricity bills. And I had to have money to buy oil to heat my home. There were no presents under the tree this year, so we had to make do with love.”

Accustomed to buying heating oil in small 50-gallon increments, Shields, 64, got some BTU’s to go along with love Saturday when an oil truck pulled up in front of her home in the tough Mt. Airy neighborhood of Philadelphia to deliver 200 gallons of discount fuel.

Jumping out of the Vincent Ferrante & Sons truck were Felix Rodriguez, president of CITGO Petroleum Corporation, and Joseph P. Kennedy II, chairman of Boston-based Citizens Energy — key partners in a heating initiative aimed at making oil more affordable at a time of record energy costs.

U.S. Rep. Chaka Fattah (D-Penn.), who brokered the deal, greeted the oil men at the curb before fuel began flowing into the fill pipe outside Shields’ brick row-home to make Pennsylvania the fifth state to receive low-cost oil under the unique CITGO arrangement.

CITGO, a wholly owned U.S. subsidiary of the Venezuelan national oil company, began providing discount fuel to U.S. customers in November with a launch in Massachusetts. Since then, the program has expanded to New York, Maine and Rhode Island, with discussions underway to provide oil in other states.

Venezuelan President Hugo Chavez, a fiery socialist with close ties to Cuban jefe Fidel Castro, has dismissed criticism of the program as a publicity ploy designed to poke a finger in the eye of the Bush administration and oil industry competitors, saying the program is an extension of ongoing efforts to provide energy relief to the poor throughout the hemisphere.

“This is not a political matter,” said Fattah, a six-term congressman considered a leading candidate in next year’s elections for Philadelphia mayor. “This is a humanitarian gesture which will keep people warm.”

As in Massachusetts and other states, the Pennsylvania program will provide up to 200 gallons of heating oil at 40 percent off retail price to households that have exhausted their federal fuel assistance benefit. Five million gallons of CITGO oil will reach 25,000 low-income homes in Philadelphia and four surrounding counties, said Kennedy, whose company contracted with CITGO to distribute the fuel.

In Massachusetts, Citizens Energy is distributing about 12 million gallons to some 40,000 fuel-assistance households.

With current retail prices hovering around $2.40 a gallon, customers of the Citizens/CITGO program will pay about $1.44 a gallon and save close to $200 on a 200-gallon fill, said Kennedy. Households that have run through their federal heating will automatically receive a letter authorizing them to contact their local heating oil dealer to arrange a delivery, he said.

The former Massachusetts congressman welcomed CITGO’s commitment, saying it stood in stark contrast to that of the federal government and other oil companies, which have reported record profits over the last year as crude oil prices have climbed to historic highs.

“Back in the summer, we wrote to every major oil company, asking them to provide a cargo or two at a discount to the poor,” said Kennedy. “CITGO was the only one that responded. Meanwhile, the federal government has failed to increase the fuel assistance budget by one dime in spite of the fact that heating oil prices have doubled in the last two years while natural gas has climbed over 75 percent in the last year alone.”

According to Kennedy, the federal Low-Income Home Energy Assistance Program has been level-funded at $2.1 billion in spite of the fact that oil and gas royalties paid to the U.S. treasury by private companies drilling on federal land have skyrocketed.

“There’s plenty of money coming out of Washington for tax cuts these days, but when it comes to heating the homes of the poor, they say there’s no money left in the till,” he said.

Efforts to boost the LIHEAP budget by $2 billion have repeatedly failed to pass Congress. Families receiving a maximum benefit of about $600 have run through the fuel assistance in record time, according to agencies working with the poor, because rising prices have eroded its value.

The CITGO CEO said the company’s outreach to Americans began in the aftermath of the Gulf Coast hurricanes last summer.

“We saw the pain those hurricanes caused people in the South. We saw how it affected our employees in Louisiana. And we understood that the increase in fuel prices caused by the hurricanes and worldwide demand were hurting poor people everywhere,” said Rodriguez.

“For me, it has been an exhilarating experience to partner with communities in the U.S. and make a difference. It is what our parent company and President Chavez have told us to do — to use CITGO’s resources to help people.”

Venezuela, the fifth-largest oil producer in the world, provides about 15 percent of the U.S. market’s petroleum. Fattah said it was ironic that Venezuela is being criticized for cutting its prices on a few cargoes to help the poor.

“We welcome any country and any oil company that wants to help our people stay warm to reach out,” he said.