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Leffler says remove tax to lower heating oil cost

By Kathianne Boniello

After the price of home-heating oil peaked at more than $2 a gallon last week, City Councilman Sheldon Leffler (D-Hollis) suggested eliminating the city sales tax on the fuel through the winter of 2001.

Dropping the city sales tax would “give the industry a chance to stabilize prices and our government a chance to work out a sufficient plan for now as well as the future with regard to oil prices and supply,” Leffler told a City Hall news conference.

Leffler's request came on the same day that Gov. George Pataki announced the state would receive an additional $34 million in the federal Low-Income Home Energy Assistance program.

“I'm pleased the federal government listened to our concerns,” Pataki said in a statement. “This funding will ensure that the program is adequately funded to meet the additional demands this winter.

The LIHEAP funding will help low-income households pay for home heating oil, the cost of which has only recently begun to drop back after soaring to $2.02 a gallon last week from less than $1 a gallon in the fall. About 3 million households in the state use oil instead of gas to heat their homes.

A spokesman for the State Energy Research and Development Authority, the agency that tracks home-heating oil prices every week, said prices have begun to slip since topping off at more than $2 Feb. 7.

Spokesman Gary Davidson said prices dropped to $1.71 a gallon this week as warmer temperatures crept into the area and demand slowed.

“Assuming no dramatic changes in the weather,” Davidson said, “it's expected to continue to drop or at least not increase.”

Politicians have blamed supply cuts by the Organization of Petroleum Exporting Countries, acute heating oil shortages and the Arctic temperatures that blanketed the area in December and January.

Mayor Rudolph Giuliani also jumped on the political bandwagon surrounding the home heating oil crisis this week as he called on President Clinton to release some of the crude oil stored in the Strategic Petroleum Reserve to drive down prices.

Several Queens politicians, including U.S. Rep. Gary Ackerman (D-Bayside), state Sen. Frank Padavan (R-Bellerose), and other state legislators, have been pressing the president to release SPR oil for weeks. The Clinton administration has steadfastly refused to do so.

Leffler said eliminating the city sales tax on home-heating oil for the next couple of years would also help homeowners struggling to pay their heating bills.

“Many people who live on a fixed income face the dilemma of having to decide to put the heat down in the midst of one of the coldest winters we have had in several years,” he said.