Written on: August 13, 2014
Despite what the mercury says, it’s time to start preparing for the coming cool of the Fall and Winter seasons.
As always, Westmore offers several options for purchasing your home heating oil – but deciding which option to choose can be confusing. Because it’s impossible to predict which direction fuel prices will trend, there’s also no way to predict which buying option will offer you the best value in a given year.
As with most buying decisions, however, it pays to be informed. To help you sort through your buying options, we’ve prepared a little “cheat sheet” to help you assess the pros and cons of each and choose the plan that’s best for you and your family.
Just like stocks on the stock market, the cost of oil in a market price program fluctuates from day to day, with no ceiling or floor. If you buy at market price, you can take advantage of falling prices without having to pay a fee – which is great if prices never go up. Unfortunately, sometimes they do – in which case your price will not be protected against rising rates.
Price Cap programs set a ceiling for the cost of your oil, which limits how much the price can rise – but not how far it can fall. Like all heating oil suppliers, we charge a fee for this service. That’s because to offer a price cap, we have to purchase insurance from our suppliers in case the market price drops. Although we charge a fee to cover the cost of this insurance, we don’t profit from collecting it.
Purchasing oil at a fixed rate locks in a price for your fuel throughout the year, no matter what happens in the market. This protects you from rising prices, but it also means we can’t lower your fuel price if the market drops. You’re “stuck” with your price all year long – which can be good or bad, depending on the market.
As you can see, each heating oil plan has its benefits, but also its risks – so choosing the right one for you will largely depend on your personality and risk tolerance. If you tend to be a “budgeter” who values planning around a predictable bill more than the potential savings you might realize if the market drops, then a fixed plan is probably right for you. On the other hand, if you fly into a rage at the mere thought of sitting idly by while your neighbor spends 30 cents less for oil than you did earlier in the season, you’ll probably want to avoid a fixed price plan. And if the benefit of knowing your heating oil price can’t rise beyond a certain threshold outweighs the cost of a Price Cap fee, then choose the Price Cap option. And so on.
These are the challenges and opportunities available to you when you choose a buying program in the unpredictable world of heating oil. But one thing we can predict is that Westmore will continue to offer the most reliable supply of heating oil in the Southern Connecticut and Westchester County – and the best customer and emergency service you’ll find anywhere.
To learn more about our heating oil plans – or to get started with one of our programs – contact us today, or call us at # (203)531-6800 or (914)939-3400.