Through the Low Income Home Energy Assistance Program, the state has for years been oil dealers’ largest customer, spending about $24 million a year. It has not, however, received a discount even though it is a predictable, reliable customer that pays up front. The Maine State Housing Authority, which administers the LIHEAP program, finally seeks to change that by setting up a new pricing system for LIHEAP oil that offers dealers three options to provide a discount.

Because LIHEAP uses taxpayer dollars to buy heating oil for low-income residents, the program has an obligation to ensure that it gets the biggest benefit it can for the money.

The housing authority board earlier this week approved three options estimated to save the state $2 million. Oil dealers can charge the rack price, which is basically the wholesale price, plus a margin that will be determined by an outside consultant. The margin will take into account overhead costs, such as travel distance to the homes of LIHEAP recipients, and profit. Massachusetts, Connecticut and New York use this system.

A second option is for dealers to offer a discount, determined by the same consultant, off the retail price of heating oil.

The third option would be for dealers to make budget plans and other discounts that are offered to other customers available to LIHEAP customers, which account for less than 10 percent of the state’s heating oil users.

Jamie Pye of the Maine Oil Dealers Association says oil companies offer discounts to customers or groups of customers who offer efficiencies, such as having automatic delivery and paying on time. Some of these efficiencies apply to LIHEAP customers, but often they do not. The situation is complex because LIHEAP covers only a portion of a customer’s fuel needs.

While the state is paying, the bills are paid on time in full, usually before an oil delivery is made. However, the rest of the year the same customers may not pay on time, may want deliveries of small amounts of oil and may need additional services such as restarting a furnace that ran out of oil.

If oil companies are forced to give discounts to LIHEAP customers, they will have to charge everyone else more, Mr. Pye says.

One way to remedy this is for the state to put out a request for proposals from companies to deliver oil to LIHEAP recipients in different regions of the state. This way the market would determine what a fair price, including a margin, would be. The oil dealers say this is a bad idea because it would interfere with the relationship people now have with their oil company.

The governor is right to want Maine’s heating assistance dollars to go as far as possible. The oil dealers should help make this happen.