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Home Heating & Fuel Prices

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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