Oilheat Facts
Modern Oilheat equipment actually burns less fuel. The average annual fuel consumption in 1980 was 1,400 gallons; and now it is only 700 gallons - that's 50% less fuel.
Full Service
Oilheat dealers are known for providing their customers with a range of services. Full service dealers offer equipment maintenance and installations in addition to fuel deliveries. While each dealer is different and offers different services, many also offer budget and service plans to assist their customers. Here are some of the most common programs or services offered by local full service Oilheat dealers:
Payment Plans
Also known as budget plans, these programs help customers manage their heating costs. In the Northeast, approximately 80 percent of the home’s heating oil is used over a period of three or four months. Payment plans spread out the cost of the winter’s fuel deliveries over 10, 11, or 12 months. Heating oil dealers use the customer’s delivery history to estimate the property’s fuel usage for the upcoming year, and multiply that amount by the estimated per-gallon price. That total is then divided into equal payments. Some heating oil dealers will adjust that payment amount during the year if it appears the customer is paying considerably more or less than estimated. Other companies settle up at the end of the payment plan term.
Price Protection
Price protection programs take budget plans a step further, by giving property owners some control over the actual cost of their heating oil. These programs generally fall into one of three categories – Fixed Price, Cap Price, and Pre-Buy.
A fixed price program is first developed when an Oilheat dealer secures heating oil contracts for his/her customers on the wholesale market for a specific price. The dealer then adds on the costs of running the business to determine the “fixed price.” Once that price is established, the Oilheat dealer’s customers can agree to buy their fuel for the season (or a specified number of gallons) at that price. Based on that contract, the dealer secures that fuel at the original wholesale price. The customer has signed a contract to pay that fixed price even if the price for a gallon of heating oil goes up or down on the open market during the heating season.
A cap price program allows for market changes, and gives the customer downside protection if the cost for heating oil drops below the set (cap) price agreed to with the dealer. The cap price is calculated in a similar manner as the fixed price, and the cap will be the highest price per gallon the customer will pay during the contract term for their home heating oil. As with the fixed price program, the customer signs a contract for the pricing, but with downside protection, if the market price drops, the customer pays the lower price.
With both fixed price and cap price programs, Oilheat dealers sign for and commit to contracts with their suppliers months in advance of the heating season. This enables the dealer to lock in a price and pass that rate (which is usually lower than mid-season) to their customers. For cap price programs, the dealer will pay for insurance to protect these investments. The cost of this insurance, often called "downside protection," is usually added to the customers' account, either as a one-time payment or on a per-gallon basis.
A pre-buy plan allows customers to cost-effectively buy heating oil in advance, agreeing to take a certain number of gallons at a set price during the next heating season. As the name suggests, most “pre-buy” plans require payment in full before the heating season begins.
There are many issues to consider before choosing a price protection plan, and not every plan is the right choice for every customer. It is not till the end of winter that you can tell whether these programs were a better value than the more traditional way of buying oil at the dealer's daily price.
Service Agreements
Many full service heating oil dealers also offer Service Agreements. These plans offer the property owner protection against costly repairs. Costs and coverage levels vary, and some dealers offer their customers a choice of plans.
Most service agreements include an annual tune up, which can increase the efficiency of the heating system, and can spot minor issues that need repair before they become costly problems which can shut the heating system down in the middle of winter.
In addition, many service agreements cover the repair and replacement of standard heating system parts, and may include additional discounts and benefits. Often, the cost of the service agreement is less than the cost of a service call and repair.
24-Hour Emergency Service
It’s 2 a.m. in early January, and you awake to an ice-cold home. Or you step into your morning shower, to find there’s no hot water. Most full service Oilheat dealers offer 24-hour emergency service during the heating season, and will have a technician out to repair your heating system within a few hours – even on holidays.
