Many homeowners are smiling this winter, because fuel prices are down 50 percent from two years ago. But not everyone is happy!
Buying heating oil is a little like playing poker: Bet on the wrong price and it’ll cost you!
With pricing hitting a 13 year low, price protection programs allow you to pay a lower price should heating oil prices fall during the winter season, but also “cap” you price should they spike. Talk to Combined Energy Services about your Price Cap Plan today!
What Happens as Fuel Prices Drop?
Company A provides fuel oil to about 5,000 customers. “Four-dollar-a-gallon oil down to $1.799 today,” Company A’s Manager says. “It’s been a ride for not only the staff, the drivers, but the customers as well.”
While many customers pay as they go, others prefer to lock in a price for the entire year. Still others pay a bit more per gallon for a sliding scale that caps how high fuel oil prices go while allowing for prices drops.
“It’s speculation,” says the manager. “People are innate gamblers by nature.”
But after watching all the news about volatile oil prices, many of those gamblers are tired of the pricing game.
Don’t Let This Be You!
On a recent subzero morning, a fuel trucks backs into your driveway. You are one of many who bet wrong on heating oil and locked in a price last June when it was 23% more.
It’s very frustrating because you plan it, and years past it’s always gone up, and now it doesn’t, and now you ask, ‘Is this really worth doing?’
Benefits of Price Cap Plans
While fixed contracts can be great when oil prices are climbing, unless you buy sliding scale insurnace there are no rebates when fuel drops.
Whenever a customer buys a fixed-price or pre-buy contract from a fuel oil dealer, the dealer has seven days to buy that fuel from its wholesale supplier. So if a customer buys a fuel contract for $700 in July, the dealer has one week to buy $700 worth of fuel.
With oil prices at 13-year lows, the popularity of fixed-price contracts has declined. Those customers who have fixed-price contracts are taking it with stride. “I feel safe anyways. If the price happens to skyrocket, I’m covered,” one customer states.
Experts don’t expect fuel prices to climb this winter. But come summer, all bets are off, and buyers will have to decide if they feel lucky when it’s time to heat their homes.
Learn about Combined Energy Services’ Price Cap Plans.