Oil Heat Fuel Price Contract
In order to stabilize your heating oil prices during the winter months, contact your local Oil Heat Council of NH dealer to learn more about types of contracts he is offering this season. There are several options depending on what your dealer provides.
I Fixed price contracts
A contract to purchase a set amount of gallons of fuel for a fixed during the winter months. The dealer usually requires payment up front.
II Budget Fixed Price Programs
You can establish a fixed price for your heating needs and pay a monthly budget amount. This costs a little more as the dealer has to pay for the oil when the dealer purchases the contracts from their supplier.
III Downside Protection
If the customer has locked in a fixed price and during the winter, for various reasons the price drops unusually low, the contract price drops to current market conditions. This option caries a premium cost per gallon, much like an insurance premium, to protect the downside price. Not all dealers offer this type of plan.
General Information
The consumer must remember that contract prices are offered early in the season. All dealers do not offer fixed price contracts. The consumer must also consider that when you agree to buy from a dealer at a fixed price, the dealer has to go to the market with the wholesaler and buy the contracts immediately. Unless you have paid the premium for downside protection, the dealer cannot lower the price to you if the market price drops considerably.
If you have any questions about contracts, contact your Oil Heat Council of NH member dealer or the Council's office.