Home heating oil can get expensive, especially in the Northeast! It creates a large amount of heat per gallon, making it highly sought after. But, it can lead to high energy bills in the winter months. So, you might be asking yourself, Should I lock in an oil price? In this post, we’ll go over weather or not you should do just that.
The Various Types of Heating Oil Prices
Heating oil prices are a little bit more complex than you might think. The first and most important question, is if you should be on automatic delivery or will-call. We discuss them in depth in our blog post here. But ultimately, will call is much cheaper than automatic delivery.
If you want to sign up for automatic delivery that’s perfectly fine! It is both convenient and easy to understand. However, please be aware that you will be paying more money in the long run. That being said, you should also be aware of what the other forms of pricing are.
Automatic Delivery: Market Pricing
If you are going with Automatic delivery, you will be charged whatever the “current rate” for automatic delivery is. This rate often tends to be determined by the oil dealer themselves. They normally take the price they pay for oil and increase it by $.80 to $1.00 per gallon to take as their profit. On average, this is $.50 more per gallon than your average will-call customer will pay. Please keep that in mind if you are thinking about buying automatic delivery at the market price.
Will-Call: Market Pricing
When comparing the market pricing of will-call heating oil, to that of automatic delivery, will-call is usually always cheaper. This is due to the fact that will-call is often more competitive. It’s more competitive because as a will-call buyer you are free to shop around and get the lowest prices available to you. The dealers are actively seeking your business, which is why will-call prices are so much lower. You can check heating oil prices in your area by using the FuelSnap website.
Fixed Price Per Gallon: Some dealers tend to offer a fixed price per gallon of oil. This typically works by agreeing to a permanent price for a specific amount of oil at a pre-decided price. The amount of oil is based upon your estimated usage throughout the year. But, there is usually a fee that comes with this, or sometimes the dealer will require that you get a maintenance plan alongside it to cover that additional fee. This is sort of a double-edged sword. On one hand you’ll save money during some years, while during others you might end up spending more.
Price Capping: This is one of the more enticing plans that dealers will give you. With this plan in particular, you only have to pay up to a certain price. Sound too good to be true right? Well, that’s because it is. They’ll normally get you to pay a fee up front, or the oil price is actually inflated! Meaning they charge you more, simply to make a profit. Another important thing to note is that if the price of oil goes down, then you’ll still be paying for the capped price. This is because, like with fixed price, you’ve decided on a price with the oil dealer. Your dealer has no requirement to drop the price of oil if it goes down everywhere else.
Getting the Best Price for Heating Oil
If you’re looking for some ways to save on heating oil, then check out our post on 10 ways to save on heating oil! However, the best way to save money on heating oil is by going to will-call delivery. This is because you’ll be able to shop around and get the best price on oil. But, you will either need to check your tank periodically, or install a Smart Oil Gauge.
If you decide to go with will-call, one of the best things that you can do is order from FuelSnap. That’s because not only does it give you the lowest prices possible, but it also locks you into the price you paid for at checkout! That means that if the price goes up, you will still have only paid the cheaper pricing!
If you decide to stick with automatic delivery, we recommend paying the market price. That way, you won’t have to worry about any extra fees for your oil or delivery! If you want to stick with a more peace of mind choice then by all means go for it! However, be aware the you are using one of the more costly forms of delivery and it will cost you more money as time goes on.