AUGUSTA – A heating oil industry official had sobering news Wednesday for a legislative panel that’s looking for ways to address a price crisis, saying customers are “desperate” and more Maine oil dealers are going out of business.

“We see a desperate customer base,” said David Martin, chairman of the Maine Oil Dealers Association and vice president of Webber Energy of Bangor. With oil running about $4 a gallon, “nobody knows” what the price will be when the cold weather hits, Martin told the Heat and Energy Emergency Task Force.

To help customers squeezed by limited incomes and rising costs of oil and other basic needs, more oil dealers – including some who shouldn’t be doing so – are extending credit, said Martin. Some dealers, he said, are also making smaller deliveries than they should.

“We see oil companies that have been great competitors for generations and generations in Maine, family-owned businesses, that probably are not well-positioned for this marketplace,” said Martin. “We anticipate as an industry that there’ll be less oil companies in the state in a year from now.”

As one of the larger players in the state, Webber Energy is “in the acquisition business,” said Martin, adding there’s a waiting list of willing sellers because the heating oil business has become so stressful. That means some customers who need oil may discover that their dealer is no longer around.

“It is not pretty,” Martin told the legislative panel, which includes Democrats and Republicans and is made up largely of leaders, during a daylong session. But he and other industry officials said no one will be completely left in the cold.

Heating oil prices in Maine have been falling in recent weeks but are still well over $1 per gallon more than they were a year ago. The task force is looking at several approaches over the longer term to help shelter people from oil price spikes and to encourage heating alternatives and weatherization.

But its immediate focus is on Congress, where members from Maine and other northeastern states have been pushing to bolster the states’ allocations under the Low Income Home Energy Assistance Program this winter.

Last year’s average LIHEAP benefit was about $750 in Maine and served about 48,000 households. But with higher oil prices and broadened eligibility standards, the state’s allocation – $38 million last year – will have to increase substantially to deliver the same benefit, the task force was told.

Its co-chairwoman, House Majority Leader Hannah Pingree, said that if LIHEAP is seriously underfunded, the responsibility falls on the state to meet people’s heating needs. And action could come in December soon after the new Legislature is sworn in, she said.

“If Congress is able to take positive action on that, that would be tremendously helpful and that will change our task here,” said Pingree, D-North Haven.

For Maine’s longer-term strategy, the task force on Wednesday began looking at what other regional states have done to cut down on heating costs. Examples are New Hampshire’s program in which efficiency upgrades can be paid with the energy savings and Vermont’s $31 million program to promote energy efficiency, according to a presentation by the National Conference of State Legislatures.

Massachusetts has weatherization assistance providing average grants of $1,600 and free attic and wall insulation, Rhode Island requires gas and electric distributors to have affordable energy plans, and Connecticut assists with weatherization, energy audits and purchases of efficient appliances.

Maine Gov. John Baldacci in August advanced a $12.6 million energy action plan that includes new investments in weatherization, low-income heating assistance and alternative modes of transportation.

In Bangor, meanwhile, approximately 50 community, church and agency representatives from Penobscot County discussed Wednesday how they could respond to what Shawn Yardley, Bangor’s health director, described as the “absolutely scary situation” facing the region as winter approaches.

Support agencies already are receiving calls from residents with empty oil tanks and no hot water, but can offer only limited prospects for assistance.

One of a series of energy strategies and resource meetings for the county, this one held at the Penobscot Job Corps Center focused on opportunities for collaboration, developing an accurate assessment of available resources and identifying effective emergency responses, including the establishment of local warming centers for those without heat.

Attendees emphasized the need to plan and prepare locally to deal with winter heating emergencies.