An oil truck pulls up to the Motiva terminal in Providence. Oil and gas prices keep climbing, but the cost of natural gas is lower.

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The Providence Journal / Bob Thayer

 Another winter of expensive heating bills is coming, and for those who use heating oil, it is forecast to be the most costly ever.

Crude oil futures are approaching $100 a barrel and that has translated into record-high heating oil prices. The average price of home heating oil was $3.129 a gallon yesterday, up 16 cents from last week, and the highest price ever recorded in the state, even after adjusting for inflation.

That average is 75 cents a gallon higher than it was a year ago. At the current price, a typical customer using 666 gallons of heating oil would pay about $2,047 for heating this winter, about $393 more than last year, according to calculations by The Journal.

The surge in oil prices, which has occurred mainly over the past three months, has taken many oil customers and oil dealers by surprise.

Fewer customers have opted for price protection plans from their oil dealers for the coming winter, several dealers said, largely because they didn’t help most customers over the past two winters.

There are two types of price protection programs typically offered by oil dealers: a cap or a lock. With a cap, the price a customer pays for oil will never rise above a certain limit, regardless of how high the wholesale price goes up. And if market prices fall below a certain level, the customer’s price will fall as well.

With a lock, a customer agrees to pay a set price for oil all winter. But unlike a cap, a lock offers no benefit if oil prices fall. Regardless of how low the market price may go, the customer is still obligated to buy the oil at the agreed fixed price.

Either program is essentially an insurance policy against rising oil prices. For that protection, a customer usually pays an up-front fee, or perhaps an extra 15 cents to 20 cents per gallon.

Some oil customers who signed up for price protection plans last year saw no benefit. That’s because during the winter, oil prices fell, leaving some people stuck paying a higher-than-market price. Even some customers with price caps ended up paying more than the market price because dealers charged more to cover the cost of the price cap insurance.

Because of that experience, customers shied away from these plans this fall.

“After last year, when prices actually came in lower, the people who opted for no program, made out,” said Victor Allienello, owner of East Providence Fuel.

He said that he signed up 10 percent to 30 percent fewer price-protected customers this year, compared with last year. Like many oil dealers, East Providence Fuel closed enrollment in the program during the summer, the time when the dealers buy much of the oil they’ll need for their customers over the winter.

With the recent price spike, anxious customers have been on the phone, trying to find whether they can still lock in their prices, Allienello said. At this point, it wouldn’t be beneficial to his company to try to offer such a plan, because he would have to charge a large premium to provide the price protection, he said.

Some dealers are still offering price protection plans. For example, Dudek Oil of Warren had a price cap of $3.149 a gallon as of yesterday. That dealer charges a $75 fee for that program.

People’s Power & Light, a nonprofit energy company based in Providence, said that its customers have saved money without a price protection plan. The company operates a heating oil buying cooperative. Members, who pay an annual fee of $20, get assigned to an oil dealer who has agreed to sell oil at a fixed amount above the wholesale price.

For the past nine years, oil prices have fallen in November and December, said Larry Chretien, executive director of the Massachusetts Energy Consumers Alliance and People’s Power & Light. Even if wholesale prices fall, many oil dealers (outside of the company’s network of dealers) will not lower their price very much, he said. “We’re seeing the average retailer in Rhode Island working on lower margins than ever before and we don’t see that continuing.”

But the dealers in the network are required to pass on those lower costs, he said.

The high price of oil has a lot of people worried about how they’ll pay for heat this winter. Gina Rojas, who lives on Whittier Avenue in the Silver Lake neighborhood of Providence, said she simply won’t have enough money.

“I have two children and it’s difficult just to pay for food,” she said. Rojas, who is a machine operator, said her take-home pay is only about $200 a week, after her employer takes out $128 for health insurance. Her husband, who works at a graphics printing company, is out of the country visiting a sick relative, she said.

They didn’t turn on their heat until last week, she said.

Kevin Mansi, owner of Dudek Oil, said he knows his customers will have a hard time paying for oil this winter. He said that his company had a minimum of 100-gallon deliveries. “Now, it’s any amount. People just don’t have the money.”

There are 8.1 million households in the United States that use heating oil to heat their homes, according to the U.S. Department of Energy. About 78 percent of those households are in New England and the Central Atlantic states. In Rhode Island, about 42 percent of all households, or about 172,000, heat with oil, according to the 2000 U.S. Census. About 46 percent use natural gas.

The surge in oil prices has made heating with natural gas significantly cheaper for the first time in many years. Under current gas rates and oil prices in Rhode Island, the average annual cost to heat with oil this winter will be $2,047 — 38-percent higher than the cost to heat with the equivalent amount of natural gas.

Natural gas users may actually pay less this winter for heat than they did last year. National Grid, which supplies gas services to 245,000 customers in Rhode Island, lowered its rates by about 1.5 percent last week. The bill of a typical customer who uses 922 therms of gas will be $1,485 this heating season, compared with $1,508 in the 2006-2007 heating season.

The utility company said its rate decrease was due to an over-collection in monthly bills last year, lower projected demand for gas, a relatively quiet hurricane season, an increase in LNG shipments, and access to a new pipeline from the Gulf of Mexico. National Grid said that prices should remain moderate through the winter, as long as there is no major event such as a severe hurricane in the Gulf of Mexico, or unusually cold weather in the coming months.

Heating oil prices are closely tied to crude oil futures. Crude oil accounts for about 60 percent of the cost of making heating oil, according to the Department of Energy.

Yesterday, crude oil for December delivery fell $1.95, or 2 percent, to settle at $93.98 barrel at 2:51 p.m. on the New York Mercantile Exchange, Bloomberg News reported. It set a new record on Friday when it closed at $95.93.

The price of oil has jumped for some of the same reasons it has in the past, plus some new ones, said John Felmy, chief economist for the American Petroleum Institute, a trade organization representing oil companies.

“In one sense, it’s a continuation of what we’ve seen in the past, with some complications,” Felmy said.

There continues to be supply challenges with countries such as Venezuela, Iran and Nigeria. In addition, the recent tension between Kurdish rebels and Turkey, and the sanctions against Iran have helped to push up prices, he said.

Another complication is the recent bad weather that has hampered oil exports coming from Mexico, the second largest supplier of oil to the United States after Canada, according to the Energy Information Administration.

That has resulted in an unexpected drop in U.S. crude inventory supply to its lowest level in two years, said James L. Williams, an economist with WTRG Economics, an Arkansas energy research firm.

In a newsletter yesterday, Williams said the impact of Mexican import shortage is short term, but may push crude oil prices even higher in the coming weeks.

On top of that, the value of the dollar, compared with the euro and other currencies has been declining, which makes oil less expensive in other countries and increases overall demand, Felmy said.

Despite the high costs of heating, there is less federal money available to help families with low incomes. The Low Income Home Energy Assistance Program, or LIHEAP, will provide Rhode Island with about $15.5 million in assistance this coming winter, said Matteo P. Guglielmetti, who runs the state’s LIHEAP program through the state Office of Energy Resources.

Last year, the state received about $19.5 million, he said, partly because of a leftover surplus from the previous year.

That means that the program will help fewer people and give them smaller grants, he said. About 29,000 families received assistance last year, and he expects that there will be enough money only for 24,000 to 25,000 households this year.

The average grant has been reduced to about $350, compared to $450 or $475 last year, he said.

“It’s going to be hard not just for low-income people but for everybody this winter, if the price continues to escalate.” He said he is hoping that oil prices drop during the winter, as they have the past two winters.

U.S. House and Senate committees are discussing raising the emergency fuel funds available to states to $431 million, from $181 million for the fiscal year that began Oct. 1, The Wall Street Journal reported yesterday.

A big unknown is how cold this winter will be. Colder-than-normal temperatures will increase demand for energy, pushing prices higher. Warmer-than-normal temperatures could have the opposite effect.

According to a temperature forecast last month by the National Oceanic Atmospheric Administration, winter in the lower-48 states is expected to be 4-percent colder than last winter, but 2-percent warmer than the 30-year average from 1971 to 2000, the Department of Energy said.

Because of expected colder weather, the agency said, heating fuel consumption is projected to increase compared with last winter.

tbarmann@projo.com