Jan. 29 (Bloomberg) -- Citgo Petroleum Corp., Venezuela’s U.S. refining company, won’t reduce its support for a program that gives free home heating oil to low-income U.S. residents, even though oil revenue exports have fallen.

“Some people thought the program was canceled, never was it canceled,” Alejandro Granado, chief executive officer of Houston-based Citgo, said in an interview today. “We are giving as much as we did last year.”

Granado spoke as at a press conference in Washington attended by Joseph Kennedy, founder and president of Citizens Energy Corp., a Boston-based non-profit that offers energy assistance to the poor. They appeared at a District of Columbia shelter to make the first delivery of heating oil this year.

U.S. households will pay about 23 percent more on home heating oil this year compared with last winter, the Energy Information Administration said in an October report. About 7 percent of U.S. households use oil as a primary heating fuel, according to the agency.

Citgo last year provided more than 40 million gallons of heating oil to the program, which it has supported since 2005, Granado said.

Citizens Energy said on Jan. 5 that it was suspending the program, citing Venezuela’s re-evaluation of its role in the program.

Citgo is a unit of state-owned oil company Petroleos de Venezuela SA. Venezuela, a member of the Organization of Petroleum Exporting Countries, based its 2009 budget on an average oil price of $60 a barrel.

Crude oil prices are 55 percent lower today than they were a year ago. Crude oil for March delivery fell 61 cents, or 1.5 percent, to $41.55 a barrel at the 2:30 p.m. close of floor trading today on the New York Mercantile Exchange.

‘Every Other Government’

“When the price of oil dropped from $150 to $30 or $40, the Venezuelan government, just like every other government in the world, had to pull back and assess what their commitments could be,” Kennedy said.

The Venezuelan government’s assessment took longer than anticipated, Kennedy said.

“It obviously delayed the start of the program, but the oil will go so fast it won’t have any material effect,” he said.

“It means that instead of getting assistance maybe at the beginning of January, you get it at the end of January or the middle of February. You still need it.”

Even with the drop in crude oil prices, heating oil prices are still high, said Kennedy. “We have so many more requests than we could possibly fill. The demand is so overwhelming.”

To contact the reporter on this story: Tina Seeley in Washington at tseeley@bloomberg.net.

Last Updated: January 29, 2009 15:40 EST