Alice Campbell of Salem, retired and living alone in her home, said she’s not sure how she’s going to deal with heating oil expenses that add up to even more than what she paid last winter, which was about $2,000 total for her small cape home.

“As it is now, I shut off my dining room completely because I don’t use it much in the winter,” said Campbell. “I don’t know what I’m going to do this winter, but we’ll have to see.”

“It’s scary. My son and I were talking about this, and the situation is getting really scary,” she said. “I’m 80 years old and I’m trying very hard to hold on to the house.”

Al and Colleen Alfaro live in Pelham.

“I know we’re estimated to spend about $4,000, and we’ve decided to go on a budget plan,” said Colleen Alfaro, adding they use Rockingham Oil in Derry.

She added they would certainly be making greater use of their wood stove this winter.

With oil prices hovering around an average of $4.50 per gallon on the low end, about twice what most people were able to lock into last year, wood may become a hotter commodity this winter than ever before.

Local governments under stress, too

Salem finance director Jane Savastano said the town’s oil rate is going to more than double come July 1.

Most of the town’s buildings run on oil heat, Savastano said. Only six, including the library and senior center, run on gas.

The town is still under contract until June 30 to buy oil for $2.15 per gallon. The town had to go out for bidding on oil again a month ago, she said, and had to lock in a rate of $4.39.

Luckily, she said, the town has enough left in its 2008 budget to pay for the oil at that price and get them through the year.

The town budgeted $187,088 for the year, and has so far expended $88,624, she said.

“It won’t be as bad for Salem as it will be for other towns,” said Savastano, pointing out the Salem has an advantage by operating its budget around a calendar year rather than a fiscal year.

Most of Windham’s town buildings run on propane, the price of which is also increasing. The administrative offices, senior center, and Searles building all run on oil heat, said finance director Dana Call.

The town was able to prebuy their oil in 2007 at a price of $2.19 per gallon, Call said, having budgeted $57,380 for oil and actually spending $53,200. When the pre-purchased fuel ran out though, Call said, the town did have to buy some at around $4 per gallon.

“We did all right because we usually pre-buy at low prices. That’s probably not going to be the case this season,” Call said.

The town budgeted $51,890 for 2008, Call said, having developed the budget numbers back in fall 2007.

“We will be over budget,” said Call. “We didn’t know back in the fall that we’d be paying this amount of money,” she said, adding the town is looking at joint buying ventures for next year.

The situation is so dire, Pelham Town Administrator Tom Gaydos joked, “We’re looking at drilling our own wells.”

In Pelham, the municipal complex, senior center and barn, annex, historical society, dog pound, transfer station, recreation building and highway building all run on oil heat, Gaydos said.

Gaydos said Pelham used 23,700 gallons of oil in 2007 for a total cost of $52,351. So far in 2008, the town has used 12,984 gallons and has spent $28,500 out of the budget.

“We bid fuel costs with the school which provides a huge savings,” said Gaydos. “We will bid again in August.”

Even oil providers feel the pinch

While they are in the money- making business, several oil companies in the state have said the through-the-roof prices are not exactly good for business, and are going to pose a problem this winter as they try not to buy too much for deliveries.

“The biggest concerns are the elderly and people on fixed incomes,” said Bill West, manager of the Derry-based Rockingham Oil. “How are they going to come up with that money? They’re going to have to choose between heat and food, and that’s not a good place to be.”

Rockingham Oil’s price is hovering at $4.49 a gallon right now, up almost double from the $2.31 the company was selling a gallon for in March 2007.

West said they’re still doing pre-buy and budget plans, but won’t set a lock-in price until August.

“For anybody in this industry, the lower the price, the more fuel you sell. But it’s a commodity – everybody needs it,” said West, adding sales are currently down and collections are higher.

Ricky Barnard, manager of Contoocook Valley Fuel, said the oil prices aren’t good for anyone, oil companies included.

Right now, Barnard said his company, a family-owned and operated business since 1961, is selling 150 gallons of oil at a discounted price of $4.59 per gallon. The company has a 100- gallon purchase minimum, and is selling 100 to 149 gallons for $4.69 per gallon.

Like Rockingham, Contoocook Valley is still going to offer pre-buys and budget plans, but won’t set a price until the end of July or August.

“I’m hoping it will get better. Some people say it will go higher, and others say it will come down and the bubble will pop,” said Barnard.

He added the nation’s reliance on foreign oil sources should be actively diminished.

“I think we should be allowed to drill inside the United States, and we need to update the refineries,’ said Barnard.

Viking Oil, based in Candia, sold out of the oil it was selling at $4.49 a gallon in two days, according to owner John Mayland.

“We usually go out with a contract at a stated price based on next heating season buys,” said Mayland. “This year, we sent out a letter to customers saying we have only so much oil, and to call for a price and contract paperwork. We sold out in two days at $4.49 a gallon. Now we’re selling at a higher price, $4.74 a gallon,” Mayland said.

Mayland added the volatile market is making it hard to determine how much he should get for his customers. “We’ve been very careful about buying too much. We’re not sure how much people are going to use,” he said.

A lot of customers have told him they’re going to keep their thermostats set extremely low and use space heaters, Mayland said.

Fred Fuller Oil Co., one of the largest in the state, is selling oil at $4.59 a gallon right now. In June 2007, said general manager Bill Fuller, the price was $2.20 a gallon.

“People can’t afford to fill their tanks or afford to do any pre-buy or budget plans,” said Fuller, adding the company will still offer both, but has yet to lock in a rate.