Important Information for Oil-Heated Homes

Connecticut is a state with predominantly oil-heated homes. As winter is on us, one of the top questions we all ask as oil-heated dwellers is “What can I expect”? I immediately sat to write this out after a conversation with a heating oil expert so I can let you all know the hints and tricks for this upcoming year.
The two main challenges are going to be PRICE and SUPPLY. It seems to be a reoccurring theme, so listen up!

Price Concerns Because of Supply

Prices are high but have remained fairly steady in the past few weeks. Gasoline correlates with oil, as they come from the same source. The prediction from our expert for the winter is that it’s going to get really bad, mainly because of an upcoming shortage.

Why? The War with Ukraine. One, war triggers crude oil to be a hot topic and Wall Street speculators are hot-to-trot day trading crude oil. The millionaires are getting richer and are NOT complaining. Same old story. Two, the US likes to help our friends. We are foreign-oil independent for winters like these, but when our allies are in NEED of oil because of war, we step in.

On Dec. 5th Russia declared that any country that aligns with Ukraine will be cut off from Russia’s crude oil. Europe is dependent on Russia for its oil. The US wants to help its allies and has begun exporting some of its supplies to Europe so the Europeans don’t freeze this winter. This, in turn, causes the US supply of oil to decrease – at a time when we need our reserves. When supply goes down, prices go up. AND THEY WILL GO UP. 

I’m going to pop you back into history for a quick second. In July 2008 there was an oil crisis. Prices went up fast and we panicked and locked into fixed rates. But then prices dropped and people who locked in had to pay super high rates. Local oil companies got a really bad rap because they wouldn’t budge and lower their prices. The idea of locking in also got sour. Why didn’t they lower their prices?? Because when you lock in with companies, the companies then pre-pay their dealers, so our local companies are locked in, too! They can’t cut you a break, as their hands are tied, as well. Really.

So now what??

1. Locking in is can be smart, but do NOT lock into a fixed rate with just any company out of fear of rising prices. Dig deeper. Ask the oil dealer if they’re offering a cap rate. If prices go higher you don’t pay more, but also make sure that if prices go down you get lower prices, too. If your dealer isn’t offering a cap rate, don’t go there. Also, ask if they’re offering an incentive cap rate deal – they offer an even better price because they’re trying to grab new customers.
2. Budget program: With prices going high, anticipate high bills in a short period of time. If we have a super cold winter you could be looking at $900-$1000 fill-ups every 3 weeks – OUCH. That’s a hard pill to swallow for even the high rollers. A budget program spreads payments out over the year. When winter’s over you can pay the winter hit off and get off the plan. Know the specifics when asking questions.
3. Get on automatic delivery TODAY!! Some people like to monitor their tank levels and call around to discount brokers. I used to do it. This is not the winter to do that. With looming shortages, discount brokers won’t be able to get supplies (and will potentially go out of business) and the dealers who can get supplies are going to take care of their primary customers first. The automatic delivery customers are their primary customers that they are contractually committed to. Get on an automatic delivery program so that you CAN get oil.

Note: If you choose to not heed any of the above advice, and you’re running out of oil and can’t find a supplier – don’t panic. Did you know that diesel at the pumps is 100% pure heating oil? If you’re running low on oil, go to the gas station and fill a 5-gallon jug with diesel, and pour it into your tank. It will buy you some time. It’s a different color, yes, but the same product. (It’s dyed because truckers were using tax-free heating oil to fill up their trucks to avoid paying taxes and the government caught on. Truckers need to pay taxes like everyone else and there’s a heavy fine if they get caught.)

• Connecticut Energy Marketers Association CEMA): https://www.ctema.com/

• CT NORA Rebates for Heating Equipment and Tanks: http://www.upgradeandsavect.com/

• Order FREE Materials: https://www.oilheatpros.com/ct/get-materials/

Related: What to Know About Household Oil Tanks