PARIS – C.N. Brown Co. has decided to pull out of a voluntary state low-income energy assistance program because the costs are too high for the company.

The Paris-based oil company is dropping out of the Low Income Home Energy Assistance Program because, it says, the state-mandated discount of 7 cents per gallon is just too much to absorb. The Maine State Housing Authority, which administers the program, increased the discount for low-income consumers from 3 cents to 7 cents per gallon for retail sales last month.

“If you’re coming off two horrible years, there’s very little money to say I’m just going to take it out of the profits. I’m not willing to do that,” said Ginger Duryea of C.N. Brown in Paris, who said the new plan would cost the company about $91,000.

The state has been administering the program for the past two years in an attempt to provide lower cost heating oil in light of oil prices that have doubled in the past few years.

“It was a difficult year last year but we did it,” Duryea said. “I don’t want to lose customers, but I also compete with high end (oil dealers.)

“Giving a few cents is not a huge amount of money for any individual dealer,” said Dan Simpson, manager of public information for the State Housing Authority. “They give cuts to neighborhood groups and associations. This is a very common practice.”

“There are 400 oil dealers. If one drops out it won’t affect it,” Simpson said. He said a survey of oil dealers showed about 60 percent of them plan to stay with the program.

Simpson said he expects the new rates will help pay for nearly 500,000 more gallons of subsidized oil than last year.

The Maine Oil Dealers Association has expressed concern over the plan, saying the rising cost of heating oil, high taxes and a tough regulatory market make even the smallest discounts a challenge.

“Our businesses are unlike any other businesses involved in social programs services,” said Maine Oil Dealers Association President Jamie Py in a statement issued recently about the increased discount. “Food stamp recipients buy groceries at any store they choose, and the store is not required to provide special discounts to the recipients. Electric and natural gas utilities participate in low-income energy assistance programs and the cost those companies bear ends up being taken to the PUC where government allows the cost to be passed on to all ratepayers. Because we are in a competitive market, heating oil dealers have no ability to take the cost of government-mandated special discounts and pass them on for others to pay for, as utilities do.”

Py said the process, no matter how well-intentioned, has resulted in considerable damage to the relationships between oil vendors, customers and the state.

“The decision was not made easily,” Duryea said. “I wasn’t comfortable charging my regular customers more in order to subsidize my less fortunate neighbor.”

Duryea said she is worried about what will happen to her low-income customers now, but Simpson said that should not be a concern with the number of oil companies available to service them with discounts.

“People shouldn’t be concerned that they won’t have LIHEAP,” Simpson said.

The program serves about 50,000 customers statewide. More than half are elderly people with incomes under $13,000 per year.

The Maine Oil Dealers Association has asked Gov. John Baldacci and the State Housing Board of Commissioners to overturn the recent ruling, but Simpson said he has not heard that the request will be taken under consideration when the commissioners meet next month.