Katrina's oil ripples

FUEL PRICES were already high. Then Hurricane Katrina disrupted oil and gas production, and prices went higher.

This is life in today's increasingly small world: A disaster in one place causes shock waves felt elsewhere. The South's hurricanes will contribute to Northeasterners' bruising winter heating bills, which are likely to be much higher than last year. That's a heavy burden for the state's poorest families.

Only 8 percent of the country's 107 million households use heating oil, according to the US Department of Energy. What makes the Northeast vulnerable is its disproportionate share: It is home to 78 percent of the total heating oil consumers.

Massachusetts is an example. On Sept. 6 the average cost of heating oil was $2.61 per gallon, according to the state's Division of Energy Resources. That's a big jump from $1.65 in 2004 and $1.23 in 2003.

The US Energy Department says the region's natural gas prices could jump by 31 percent.

Poor families do get help. The federal government's Low Income Home Energy Assistance Program gives states money to buy fuel for struggling families. Last year, LIHEAP funding was $2.2 billion. Of this, Massachusetts got $90 million, and the state Legislature added another $7.5 million. Tomorrow the joint Committee on Telecommunications, Utilities, and Energy will hold a hearing at the State House on fuel assistance. Advocates plan to ask the state to once again add to the federal LIHEAP dollars.

To make the money go further, Massachusetts officials negotiated a discounted price with oil vendors: 28.5 cents per gallon above wholesale -- a savings of 30 percent, according to officials at the state's Department of Housing and Community Development.

More federal help is needed. Sadly, LIHEAP funding proposals from Congress and the president hover around $2 billion, roughly the same as last year and not enough to keep up with price hikes. Senators Edward Kennedy and John Kerry and other senators have requested an extra $900 million. Congress is authorized to allocate up to $5.1 billion.

A worst-case scenario is an early winter, with refineries slow to produce home heating oil, explains Mark Wolfe of the National Energy Assistance Directors' Association, a nonprofit organization in Washington. ''The world that shops at Whole Foods and buys BMWs will be OK," Wolfe says, but people who shop at Wal-Mart would be hit hard. And for families with no savings, the more they spend on heating, the less they'll spend in other parts of the economy, potentially hurting retail and other industries.

The federal government can make a difference, investing wisely in fuel assistance to stop a looming hardship before it happens.