Since early last autumn, residents in our area have seen a steady drop in the price of heating oil. Unfortunately for many, they couldn’t take advantage of the savings because they had signed a contract ‘locking-in’ a price of over $4 per gallon – fearing yet higher prices to come.

But when the price per barrel of oil dropped by more than half, most heating oil companies would not lower the contracted price a penny. For that matter, when the cost per barrel dropped by more than two-thirds, the fuel oil distributers never lowered the price enough to reflect the enormous price cut.

Again, many heating oil customers are being pressured to sign contracts to ‘lock-in’ an oil price reflecting today’s market. But many of the new contracts contain a clause that could increase the customers’ cost per gallon by a prescribed percentage if the cost of a barrel of oil increases. Conversely, there is no remedy if the price decreases.

Before signing on the dotted line of any ‘fixed price’ contract, be sure to read the fine print; and if there is a giant loophole to ensure a higher profit margin for the fuel oil company, don’t jump through it.

Until next month,

Michael Hoffman