Should you lock in your oil prices?
You may have noticed more heating oil trucks making deliveries today as temperatures dipped and prices ticked up slightly.
The state Department of Energy Resources finds the average price statewide is $2.90 a gallon, up 42 cents from this time last year but only about 2 cents from early March. “So I see stability in the price of home heating oil for the season. The wild cards here are always weather, unpredicted world-wide events,” said Michael Ferrante, President of the Massachusetts Oilheat Council, which represents more than 350 heating oil businesses.
“Supply is good. Demand overall for petroleum products is down. That bodes well for lower prices going forward,” said Ken Williams of Scott Williams, Inc. a 70-year-old heating oil company based in Quincy. So, should you lock-in the price, with a protection plan that allows you to either cap or freeze your price? Ferrante said it’s hard to give solid advice on that but, “17 or 18 of the last 20 years, they have delivered economic benefits to consumers meaning their prices have been stable,” he added.
One South Shore homeowner said she prefers to pay cash for her home heating oil because that works best for her.
Williams agrees and does not recommend locking in the price. “I think it’s gambling on a price. I don’t think homeowners should do that. They don’t do it with any other commodities they buy. We don’t think they should do it with heating oil,” he said, noting prices moved down between September and January in four out of the past six years.
“The pricing of the fuel on price protection plans varies from dealer to dealer because they buy certain quantities of that fuel,” explained Ferrante.
Regardless of what happens to average home heating oil prices this season, Ferrante said shopping around probably won’t help because pricing is competitive among dealers.
The Massachusetts Oilheat Council and Williams said the best protection is a budget plan, a 10 or 12 month payment plan, because it gives you structure and provides planning for heating needs during the year