Was locking into an oil contract the right call? It’s too soon to tell

Published: Oct. 26, 2022 at 11:50 PM EDT
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MORETOWN, Vt. (WCAX) - The price of heating oil continues hitting record highs, a noticeable impact of the war in Ukraine and other market forces. Many Vermonters are already locked into fuel prices for the winter, but some are questioning if it was their best move.

Experts say people who locked into pre-buy prices in late spring won’t know if they have a good deal until January when oil prices tend to peak.

“I paid $1,200 last year and this year it was over $2,200 for the same amount of oil,” said Bill Bandy from Moretown. He says he shops around for the best price of oil every spring and that this year it seemed like no one was offering a deal. “I had no alternative.”

People, like Bandy, tend to lock into heating oil contracts in June or July, which is usually a good call. State data shows oil prices peak in the winter months, when it’s in highest demand.

Matt Cota with the Vermont Fuel Dealers Association says a fixed contract doesn’t guarantee the best price but protects buyers and retailers from market fluctuations. “If a heating fuel dealer sells you a fixed price contract, they’re required to acquire those gallons within seven days of selling it,” Cota explained. This means if prices drop, the retailer will not make an additional profit. It also means if prices rise, buyers and retailers won’t be out any money. Some oil companies also offer capped contracts, meaning buyers can benefit from market fluctuations, but won’t pay over a certain amount.

Vt. Department of Public Service Commissioner June Tierney says there’s not a sure way to predict heating oil prices for winter months. She says the best thing people can do is weatherize their homes and bundle up. “What events such as the disruptions of world markets through the continuing troubling issues in Ukraine has shown us is those things can happen on the turn of a dime,” Tierney said.

“I count my pennies and I can afford what I need, but a lot of these people don’t have the money, so I don’t know what they’re going to do,” Bandy said.

For people who are still figuring out how to fill their tanks, there are a few state resources. You can get help through the Vermont Emergency Rental Assistance Program by calling 1-833-488-3727. You can also contact the Low Income Home Energy Assistance Program.