Shocking Spike in Fuel Prices

October 19, 2022 update

This year, volatile energy prices have been an unpleasant fact of life. After heating oil prices spiked in the spring, we saw them decrease throughout the summer. These price fluctuations were driven by global factors, including market speculation, supply issues, and the conflict in Ukraine.

On October 5, OPEC reduced its oil production by two million barrels a day, and this has caused prices to skyrocket yet again. In just the last few days, the price we pay for heating oil has increased by more than a dollar per gallon.

We want to say right away that this situation frustrates us as much as it does you. We hate the disruption to our business and especially to you, our customer. We hope prices go down again soon, as they did over the summer. But with prices changing so quickly, no one can definitively say where they’re are headed in the weeks or months ahead.

With history as our guide, we can say two things with confidence. Firstly, this price spike will not be limited to heating oil — all energy sources with be affected, from natural gas to grid electricity. Secondly, what goes up must come down. It’s just a matter of when.
We’ll keep tracking heating oil prices daily (sometimes hourly) and keep you in the loop. In the meantime, there are some steps you can take.

Enroll in our no-fee automatic delivery if you haven’t already. We have great relationships with our fuel suppliers. Still, there’s reason to believe that oil supplies will become a problem in the coming months. Having customers on automatic delivery helps us effectively manage our supply and ensure everyone stays comfortable and safe. And remember, we always prioritize our current customers.

Additionally, we can help you plan for higher prices by providing a breakdown of your prior heating oil usage that you can use to budget for the winter. Please let us know if we can help.

Finally, please call us if you’re worried about paying. We can almost always work out a solution with you. But the sooner we can address your concerns the better. Please don’t wait to contact our team.

We have been in this business a long time, and we’ve weathered many tough periods. Rest assured that we’re doing everything we can to help you navigate the winter with a little less stress. We are always here when you need us.

May 18, 2022 update

Keeping you in the loop about fuel prices

We know many of you are looking at the energy cost increases and wondering when this will end, and I don’t blame you. Our goal is to keep you in the loop as much as possible, even though the situation remains very fluid.

Last week, our suppliers again raised prices over 65 cents per gallon over a few days. The reasons are complicated and seem to be affecting heating oil and diesel fuel much more than gasoline.

The driving factor is that both are in abnormally short supply now (heating oil and diesel are pretty much the same things). In fact, if you look at prices on the commodities exchanges, they show heating oil at a dollar less than we can get it at! That never happens. It’s called “basis blowout” and reflects a disconnect between the markets and actual supplies.

Good News and Bad News

The good news is that the supply issues are happening because the markets expect heating oil to go lower by a fair amount over the next several months. Fuel suppliers are reluctant to purchase fuel now and get stuck with higher priced product. The bad news is that it is causing prices to be artificially higher now, and no one really knows for sure what will happen with the Ukraine war. The war is also causing a historic amount of diesel fuel to be shipped to Europe, which is impacting heating oil as well. By the way, we are seeing the same kind of surges in Natural Gas and electric costs.

What we are doing about it

We decided to hold off most deliveries save for those who seemed to be running low. It didn’t help that we’ve had an unusually cold spring, and people are still using their heat. Beyond that, we want to urge people to get on our budget billing program, which allows us to spread your fuel payments over 12 months. If prices do stay high next year, it will be much easier to manage your bills if you don’t have to pay for all of your deliveries in just 5 months of fall and winter.

There is no way of knowing whether prices will rise or fall going forward. However, we will do our best to keep you in the loop as things emerge.

If you have any questions, don’t hesitate to call our office. We are here for you.

March 9, 2022 update

Unsurprisingly, we’ve been getting many calls around two connected issues- the surge in fuel prices and supply concerns. People are astounded by how much prices have risen, and how fast. They are also concerned that there will be interruptions in supply that will cause them to run out of fuel.

Prices were already up more than a dollar this season from the previous year because of issues related to the pandemic. Then, the Russian invasion of Ukraine shocked the energy markets, sending crude oil up to over $120 per barrel.

To give you a sense of this of how this affects us and you, on March 2, we received notice at night from our suppliers that their prices were going up 20 cents the next day. Then, on March 3, they went up three more times- a total of 60 cents in just 24 hours.

What’s coming next

We don’t know where things will go from here. One thing we can tell you is that we hate this as much as you do. Some people are under the misconception that when prices rise, we make more money. The opposite is true. People cut back usage. They have trouble paying their bills and our receivables skyrocket. Meanwhile, we must pay our suppliers in just 10 days. We must borrow much more from the bank. It is an awful mess for everyone.

One thing you can count on is that we will not let you run out. We have been in many years and have very strong relationships with suppliers and financial institutions. We are already getting calls from customers who are with other companies who can’t say the same, and who are unable to get deliveries for 20 days out. You don’t have to worry about that with us.

If you have having trouble paying your bill talk to us. Many times, we can work out something to give you more time, especially if you’ve been with us a while. Remember that we do offer price protection options and will be coming out with those sometime mid-April.

Nothing will make us happier than when prices start dropping. Until then trust us to look out for you and pray for the people of Ukraine.