Heating Oil Pricing Plans: Options for Managing the Cost of Your Fuel Oil

Choosing which heating oil pricing plan is best in a given year can be challenging, since oil prices fluctuate – sometimes significantly – from season to season. But like any buying decision, it pays to be informed about your options so you can choose the plan that’s best for your budget – and your tolerance for risk.

Generally speaking, there are three ways to determine the price that you pay for oil in a pricing plan: market price, fixed price, and price cap.*

• Market Price – Since oil is a traded commodity subject to market forces, the market price of heating oil changes from day to day, with no price ceiling or floor. That means you’ll benefit from falling prices without paying a fee – but you’ll also pay additional for heating oil when the price goes up. Market price is the least predictable of the three basic options listed here.
• Fixed Price – A fixed price plan locks in a heating oil price for the year, regardless what happens in the market. That means you’ll benefit prices rise, but can’t take advantage if the heating oil market price drops.
• Price Cap – A price cap program limits the ceiling of your heating oil price – but not the floor. That means you’re protected against rising prices while still being able to take advantage of falling prices. You will, however, pay a fee for this service: the fee covers our costs to purchase insurance from our suppliers to cover losses if the price drops (the fee only covers the cost of the insurance; we don’t profit from collecting it).

Each of these options has its advantages and disadvantages – and much of the decision about which plan is right for you depends on your tolerance for risk. If you’d like help in choosing a plan that’s the right fit for your family, contact us today – we’re happy to talk about it.

Price Cap enrollment is open now – even if your current plan has not expired. Contact us to enroll today!

* Each of these options can also be combined with a pre-buy (for fixed or price cap) or monthly payment plan option – learn about the complete range of our heating oil pricing plans and other buying options here.