HOUSTON -- CITGO Petroleum Corp. has agreed to extend its heating oil assistance program to Rhode Island by providing 3.3 million gallons of the fuel to low-income Rhode Islanders at a 40% discount, reported the Providence Journal.
The deal, which was brokered by the office of Senator Jack Reed (D-R.I.), is expected to be finalized on Friday, his office told the newspaper.
CITGO established a program last fall to distribute up to 45 million gallons of discounted home heating oil to poor residents of the United States. Customers [image-nocss] in the Northeast consume about 80% of all heating oil in the nation.
The company has already agreed to distribute 12 million gallons of heating oil at below-market prices to needy households in Boston, and eight million gallons to residents of the Bronx in New York City.
The Rhode Island program is expected to help about 9,000 households, saving them a total of about $2 million, Reed's office said. It will be open to families who receive aid through the federal Low Income Home Energy Assistance Program. There were about 9,000 LIHEAP recipients heating with oil last year.
The CITGO program will be administered by the various community action programs in Rhode Island, as well as Citizen's Energy, a nonprofit energy company in Boston. The CAP agencies will take applications for assistance beginning Friday, according to Reed's office.
Those who are eligible can receive one delivery of oilfrom the dealer of their choiceof 275 to 300 gallons, and pay the dealer 60% of the retail price on the day of delivery. The dealer will then recoup the remaining 40% from Citizens Energy, which is also administering CITGO's program in Massachusetts, the report said.
About three million gallons of the oil will be reserved for residential use. The remaining 300,000 gallons will be available for purchase by agencies and organizations that provide assistance to low-income families, such as food banks, said the report.
Rhode Island will not actually take delivery of the oil. It will be stored in a terminal in East Braintree, Mass.
As reported in CSP Daily News, the CITGO program stems from a pledge in September by Venezuelan President Hugo Chavez to provide cheap oil to low-income households in the United States in light of rising energy prices. In November, CITGO launched the first such initiative in Massachusetts with 12 million gallons.
In October, Reed wrote to several major oil companies, including CITGO, asking each to donate 10% of their third-quarter profits to heating-assistance programs. According to the Providence Journal, the only company to respond was CITGO, Reed said.
"CITGO believes that it is crucial to act as good corporate citizens and help those in need as circumstances allow in our states and regions of operations," wrote Rafael Gomez Abreu, the company's vice president of strategic relations.
Meanwhile, four Maine Indian tribes announced last week that they will purchase heating oil for tribal members at deep discounts from CITGO, said the Associated Press.
The state of Maine is negotiating a similar deal that could bring a discount of five and a half million dollars.
Critics of Venezuelan sales of cheap oil in the United States have accused that country's president, Hugo Chavez, of trying to score political points for himself while embarrassing President Bush. But Maine House Speaker John Richardson defends a deal with Venezuela, saying the need for oil in Maine is great.
Last week, the state legislature appropriated five million dollars for additional heating assistance, and a private charitable fund is soliciting donations for heating help. Donations are being solicited in TV ads.
Click here for information on CITGO's heating oil program.
CITGO is owned by PDV America Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela SA (PDVSA), the national oil company of the Bolivarian Republic of Venezuela.
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