Was locking in an oil contract the right choice? It is too early to tell

MORETOWN, Vermont (WCAX) – Furnace oil continues to hit record highs, a notable impact of the war in Ukraine. Many Vermonters have already locked in prices for the winter, but some wonder if this was their best decision.

Experts say people who locked in prices in late spring won’t know if they’ve got 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 of Moretown. Bandy says he shops for the best oil price every spring. This year, it seemed like no one was coming up with an offer. “I had no alternative,” Bandy said of locking in a prize. “With what was happening everywhere, we know the shortage is coming.”

People, like Bandy, tend to do oil deals in June or July, which is usually a good move. State data shows that oil prices peak during the winter months when they are in greatest demand.

Matt Cota of 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 fuel oil dealer sells you a fixed price contract, they are required to acquire those gallons within seven days of the sale,” Cota explained. This means that if prices go down, the retailer will not make any additional profit. It also means that if prices go up, buyers and retailers won’t lose money. Some oil companies also offer capped contracts, which means that buyers can benefit from market fluctuations, but will not pay more than a certain amount.

Public Service Department Commissioner June Tierney says there is no sure way to predict fuel oil prices for the winter months. She says the best thing people can do is weatherproof their homes and bundle up. “What events such as the disruptions in global markets through the ongoing problems in Ukraine have shown us is that these things can happen in a jiffy,” Tierney told Channel 3.

“I’m counting 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 of other people he knows.

For people still looking 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.

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