Choosing the best heating oil pricing plan can be a challenge, since oil prices can change so much from year to year. But like any buying decision, it pays to understand the pros and cons of your options so you can choose the plan that’s best for you.
Heating oil price basics
In the heating oil business, there are three basic ways to determine the price of your heating oil: You can pay:
The market price, which changes from day to day with no upper or lower limit;
A fixed price, which locks in a heating oil price for the year regardless what happens in the market; and
Using a price cap, which limits the maximum price you will pay for oil, but not the minimum price you could pay if prices drop. There is always a fee for price cap service, which basically covers a dealer’s cost to insure gallons with oil suppliers in case prices fall.
Most heating oil providers will also offer some kind of budget plan, which makes your billing more predictable by dividing your annual bill into 11 or 12 equal payments based on an estimate of the amount of heating oil you’ll use in a typical year.
PGagnon: Peace of mind pricing options
Now that you know the basics, we can talk about the great and flexible options that PGagnon and Sons offers. They include:
SimplePay/Price Cap: Basically a budget plan with a price cap; your bills are broken in up to 12 equal payments, and you’re protected no matter what direction the oil markets move. There is a fee for this service.
PrePay/Price Cap: This is a fixed price program (you pay in advance) with a price cap (you pay our lowest cash price or your capped price, whatever is lowest). There is a fee for this service.
Flex Plan: This is a market price plan with a 25 cent per gallon discount for paying in advance.
Fixed Price: See definition above.
SimplePay: This is a budget plan paid at market rate rather than with a price cap; you can also get a 20-cent per gallon prompt payment discount.
Each of these options has its advantages and disadvantages – and much of the decision about which plan is right for you depends on your tolerance for risk.
Need help in choosing a plan that’s the right fit for your family? Contact us today – we’re happy to talk about it!
