Easy Steps to Save On Heating Oil

Seven On Your Side
March 9, 2009 11:16:35 AM PDT
Oil has come down off its summer highs. But still, experts are predicting an expensive winter, with bills more than twenty four percent higher than last winter. But there are some steps you can take now to save you money when it gets colder. "They don't want to come for another 21 days," said oil heat customer Paul Hoffman. He's referring to his heating oil company. About a year ago, Paul paid to lock in his per gallong price with his fuel company at just $2.99 per gallon. And now it's going up.

"I just got the new contract couple days ago and it's going up to four seventy-nine," Paul says. The level in his tank was getting low, so he wanted to fill it up at the lower price, but his oil company said, no. "And then they're trying to push us off. The kicker was one day after the contract ends, which really just like kind of got under my skin a little."

That's right, the oil company said they wouldn't come until the day after the price went up.

"A contract is a contract is a contract," warns Kevin Rooney CEO of the Oil Heat Institute of Long Island. It turns out the fuel company was within its rights. Deliveries are determined by computers which factor each client's usage, the recent weather, and temperature. And in Paul's case, he signed a contract that prohibited "topping off the tank."

"Automatic delivery is determined by degree days, you get oil when you need oil. Not when you want oil," says Rooney.

There are several types of contracts you can get with fuel oil companies. You can lock in a price, like Paul did. Which means you pay the negotiated price, even if the cost comes down. You can cap the price which means it can't go above a certain amount and you pay the lower price if it comes down. Or you can get on a budget plan where you pay the same amount every month, year round.

But there is possible relief for Paul. He can pay a penalty of several hundred dollars and get out of his contract. And since the price is now *down* about a dollar a gallon, it could be worth it.

"If you use (hypothetically) a thousand gallons. And you could save a thousand dollars by paying a fee of three hundred. Who in their right mind wouldn't take that option?" says Rooney.

Story by: Tappy Phillips
Produced by: Steve Livingstone