If you use oil to heat your home, as many people in the Northeast (U.S.)
do, you can save a substantial amount of money by choosing the season
of the year in which to initially fill your tank. Home heating oil prices
vary seasonally due to changes in supply and demand. Of course, other
real factors (such as crude oil supply disruptions, refinery downtime,
quantity of home heating oil versus gasoline being refined) and
perceptions (such as the fear in early 2003 that war with Iraq would cut
off the flow of oil from the Persian Gulf) influence prices. Fill
your tank during the “off” season to save some cash.
An even better way to save money on home heating oil is to participate in a
“cap” or fixed price protection program. Many home heating
oil distributors and dealers offer such plans. Fixed price protection
programs are offered during the late spring and summer months when home
heating oil prices are low. You agree to purchase a specified quantity of
home heating oil, which is then delivered in increments throughout the
heating season. By participating in such a program — which may
require full or partial up-front payment — you and other customers
enable your home heating oil distributor to purchase volume contracts for
future home heating oil deliveries at locked-in low prices; in return,
the price you pay is considerably lower than what you would pay during the
winter months, which may result in hundreds of dollars in savings depending
on your usage and location. Talk to your home heating oil dealer or
distributor about fixed price protection programs and how you can
participate.
HAVING TROUBLE PAYING YOUR HEATING BILL?
Both Federal and State energy assistance programs are
available to heating oil customers who have a limited budget. The
Low Income Home Energy Assistance Program
(LIHEAP) is a Federal program that distributes funds to states to
help low-income households pay heating bills. Additional state energy
assistance and fuel fund programs may be available to help households
during a winter emergency. To find out if you qualify for assistance
in your state, see
LIHEAP State Grantees or contact your local home
heating oil dealer.
Other commodities, such as natural gas and gasoline, behave in a manner
similar to heating oil. You do not have much of a choice as to when
you can purchase these consumables, since natural gas is a
“delivery on demand” item (You receive natural gas through
a pipe to your home as you use it and have no tank to store it.) and the
gas tank in your car or truck is not large enough to take advantage of
seasonality. Natural gas users may be able to participate in a future
delivery program. In this era of deregulation and stiffer competition,
you may also be able to receive a cheaper rate by switching to another
natural gas provider. Talk to your utility company about budget plans
for natural gas delivery.
Authored by Kenneth L. Anderson.
Original article published 8 April 2003, updated 10 September
2004.
We have included current one-year spot price charts for crude oil, unleaded
gasoline, heating oil and natural gas so you can observe the price
fluctuations these products undergo. The prices you see here are
“raw”; they do not include taxes, distribution fees and
other charges, so the actual price you pay can be substantially higher.
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