Consumer Guide to Heating Oil Prices


Dear Friends and Customers,

When energy prices rise, we all feel it. Without a good understanding of what causes these ups and downs, it's easy to think the worst.

As your local oil dealer, we may not be able to control world energy prices, but we can help you make sense of how things work, so you can make the best decisions for your family.

If you have any questions at all, don't hesitate to call us at 607-272-2250. We're here for you.


Why aren't oil prices regulated?
They used to be, but this led to inflated prices and artificial shortages. Now, while prices can fluctuate sharply under a free market, they have generally stayed much lower and supplies have not been a problem.





Do local dealers make more profit during sudden price increases?
No. When world oil prices rise, it doesn't mean they get a bigger share of it. It's similar to when orange juice prices go up because of an early frost.The local grocery doesn't make the extra money.

So who does make the money?
Anyone (including the major oil companies, refiners, speculators and others) who was either smart or lucky enough to have secured oil before prices started to rise. However, these same people would have lost money had prices dropped.



Do local dealers wait to deliver until prices are highest?
It's tempting to think that, especially if you've just gotten a high-priced delivery. But remember, your local dealer has no way to tell what will happen to wholesale prices from week to week. Until they can find a better crystal ball, dealers base their deliveries on customer needs

How can companies in the same area charge very different prices?
Heating oil is a very competitive business. At any time, you may find people who are priced either higher or lower than your dealer. The difference often depends on:

• The quality of the fuel and certainty of their supply.
• The quality of service they provide.
• The payment terms, delivery options and equipment repair service they offer.

After wholesale prices drop, when do retail prices follow?
It depends on how much oil your local dealer bought and stored at a higher price, and how quickly he sells it due to cold weather. It also depends on how much of the original wholesale increase he absorbed to cushion his customers when prices went up.

How are oil prices set?
Heating fuels like oil, natural gas, propane and electricity are traded on the commodities market which goes up and down like the stock market. By far, the biggest influence on the cost of heating oil is the price of its raw material, crude oil.

What can cause rapid price changes?
The market responds immediately to any situation that might affect supply or demand, including unexpectedly cold or warm weather, supply interruptions or excess production. These changes are immediately reflected in the wholesale price your dealer pays for the oil he delivers to you.

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