This link is to an online trading chart describing the expected arc of fuel oil prices through December of 2010. Some of you who burn home heating oil have already bought, at rates from $2.oo US to $2.30 US. And you did well. What you can expect, according to the futures price charts, is steadily rising prices on wholesale fuel oil through December, topping out at about $2.30. Notice I said wholesale.
You will actually pay retail, which will range from 10% to 40% over wholesale. The difference pays for your oil company to operate trucks, pay licensing and insurance fees, make payroll, prebuy wholesale lots at the terminal (big tanks, usually near railroads or water ports), and make a living.
Notice I said 10% to 40%. Quite a range. So-called full service oil companies keep technicians in house to repair customers’ equipment. They claim they operate this team at a loss or at break-even. Your oil will cost more because you are paying for “good service.” So-called “Discount” oil companies do not maintain service teams, or train their drivers to perform simple repairs, and you can’t get them at midnight on New Year’s Eve. And you pay less for your oil. The fact is that many companies struggle to make ends meet on the “discount” model, and the most successful oil companies in our corner of Connecticut are those that maintain service teams. And they charge more for their oil.
You have another option. There are lots of companies: say mine, for instance, which sell no oil, only service. We work hard to keep customers’ equipment running year-round, and you can get at least some of us on New Year’s. I was out on Christmas Day last year, but it was only two hours, then back home to dinner. I don’t run my service operation at a loss, and my rates are competitive with those of the “full service” oil companies. Curious, wouldn’t you say? Maybe they really do lose money on their service. But I don’t. That’s my living.
So ponder your options as a heating oil consumer, and measure whether the convenience of calling one company for oil and equipment maintenance is worth a premium price per gallon for heating oil. Consider the numbers, ask for price quotes, inquire about budget plans and pre-buys, and make some smart choices about how to get through this winter. I’ll be busy all fall with preventive cleanings and service, but not too busy to help you get your heating and hot water equipment ready for winter. Most of my customers see me just once a year, for the preventive maintenance. Sometimes we replace a part before it fails, and my customers trust me to make that judgment. Then they don’t have to call me on New Year’s Eve.