Question for those that heat with oil

Beeman · #1 02/08/09, 07:27 PM

It wasn't that long ago I heard of fuel oil prices over $4 a gal. and people "locking in" at that price. Even heard of some paying to lock in. How did it all work out now that price of crude has dropped? Did heating oil drop as much as diesel fuel? Just how badly did people get scammed on this deal?

fantasymaker · #2 02/08/09, 07:41 PM

Its not a scam! Many people are not willing to gamble so they locked in a price that they knew. When you dont gamble you cant win so when prices went down they didnt win which is nearly the same as losing.

bluetick · #3 02/08/09, 07:54 PM

I paid to lock in at over $4.00/gallon for fuel oil in August when the price was still climbing. Since then I've had one delivery at $3.21/gallon in December. The next delivery is scheduled for early March. (I have two 275 gallon tanks.)

I am on a budget plan, and my monthly payments have dropped from $323 to $234 at least a couple of months ago. (The monthly payments include pro-rated amounts for propane for cooking and a service plan.)

My company is good in that they reduce prices for their customers when they pay less.

bluesky · #4 02/08/09, 08:34 PM

We got 250 gallons of fuel oil in the fall at about $875. Our budget payment is $101 a month. We need another 100 gallons or so and I'm calling tomorrow. I'll be interested to see how much that costs now that prices are down.

Beeman · #5 02/08/09, 11:20 PM

Quote:

Originally Posted by bluetick

I paid to lock in at over $4.00/gallon for fuel oil in August when the price was still climbing. Since then I've had one delivery at $3.21/gallon in December. The next delivery is scheduled for early March. (I have two 275 gallon tanks.)

I am on a budget plan, and my monthly payments have dropped from $323 to $234 at least a couple of months ago. (The monthly payments include pro-rated amounts for propane for cooking and a service plan.)

My company is good in that they reduce prices for their customers when they pay less.

OK, so you locked in at $4 as a max price but if the price drops you pay less.

rambler · #6 02/09/09, 12:32 AM

Diesel = heating oil 'here', and is at least similar all over, so the costs should always be close.....

This mid summer I contracted for 600 gallons of diesel fuel for my farming at right close to $4 a gallon, paid in full ahead of time, for delivery in fall. When I was harvesting, I was using the $4 fuel in my combine, while it was costing others $3.23 for a deleivery that same day.

How the cookie crumbles. One more hurricane in the Gulf, and the ecconomy hanging on another 3 months before croaking, & I mighta been looking at $6 a gallon so the $4 woulda looked good.

Farming is all about deciding when to buy fert, fuel, seed, and machinery, and when to sell the crops & livestock. You won't guess right all the time.

In December I paid in full, 800 gallons worth of diesel, to be delivered this early/mid summer, for around $1.70 a gallon. I think that will look real good, and probably balance out my $4 purchase to where I am about even. But, just a guess.....

These are hard contracts, I don't get any better deal if the price of fuel drops, and they don't get to change the price if it goes up.

--->Paul

Cindy in PA · #7 02/09/09, 07:18 AM

After not locking in last year, my 83 year old Dad paid $4.39/gallon in August. He only got 500 gallons. Price has been from $2.39 to 1.99 this season, so he lost big time. I am sure that he will never lock in again and the prices will go up, so he is just taking it as it comes. He did get an Edenpure heater this year and still is slightly ahead paying his electric instead of oil, even at $1.99, which I would not have thought would be the case. He only has a year before the rates will increase by over 50% though. Makes me so glad we have wood and coal and don't use fuel oil or the electric heat pump. My sister switched from an old gas heater to a heat pump this year & here last electric bill was $498 for an 1100 sq. ft. house, ouch!!

Home Harvest · #8 02/09/09, 12:30 PM

We are on a budget plan, but we con't lock prices. We currently pay $175 per month, year round for oil ($2100 for the year). If we use more they will send an extra bill in the spring. If we use less, they apply it to next year, and the monthly goes down.

I know of people who locked in, and lost. I also know of people who prepaid, and the company went out of business. Those are the people who got scammed. Then there is the double dipping on the prices. By that I mean, when the price per barrel goes up, the price of oil and gas immediately goes up. We are told this is in anticipation of the price increase. When the price of a barrel of oil goes down, it takes a LONG time for the retail price to go down. We are told that this is because they are still delivering the expensive oil from when the price was high. We pay the higher price a month before, and a month after the price increase in crude. What a racket!

cfabe · #9 02/09/09, 12:57 PM

It's a gamble either way, pre-buy/locking you're gambling that the price will go up, paying market price as you need it you're gambling that the price will go down. The only way to beat the system at all is to have a large enough tank to store a years worth of fuel and refill in the summer when prices tend to usually drop. Of course if you did that last summer, you'd have been buying the $4+ fuel! So you're never going to win all the time.

RandB · #10 02/09/09, 01:02 PM

We do a budget plan, too. They come up with a monthly payment based on prior usage, and the current oil price. Our dealer than guarantees you won't pay more than that current price, and if the price is lower, you will get the lower price. The budget started in August, and was based on something like $4.85 a gallon. Then, when prices dropped, we got a notice in November that they had re-calculated and our monthly payment dropped by about $40. It is a pretty good plan, overall. We have never ended up owing them anything, and if there is a surplus, you can roll it over to the next year.

**GREENCOUNTYPETE** · #11 02/09/09, 01:53 PM

we locked at 4.06 for 400 gallons that was the minimum to do the monthly plan start paying in september and done in june

we had installed a wood stove and i told my wife get 300 gallons we used 600 they year before and had contracted 700 and had about 5/8ths of a tank headed into this year
so she contracted for 400 every other year they have called us up in june and said we can send you a check for your amount , usualy with summer driving starting the price was up and we would some years take th emoney and some years take the fule

so yes i just took my first fill of the year yes it sucks i paid 4.06 when going is 2.30 somthing but it was bugeted for so is is what it is.

no i will never contract again i don't need enought while burning wood to make it worth while and if they won't give me back the money i will take the rest of the oil next year

DW · #12 02/09/09, 04:47 PM

when we contracted, it was the max price you would pay but if the price went down, you would pay the lower price.

**GREENCOUNTYPETE** · #13 02/09/09, 08:03 PM

Quote:

Originally Posted by DW

when we contracted, it was the max price you would pay but if the price went down, you would pay the lower price.

here they offer price assurance but since no one thought it was going down and we realy didn't have 31 cents a gallon up front to get the price assurance we didn't a expensive 31 cents it turned out to be live and learn.

PrincessFerf · #14 02/09/09, 09:02 PM

We also locked in our price around $4.03 a gallon last fall, but if the price dropped (which it did) we pay the lower price. The "lock-in" was simply the maximum we would have to pay.