1979 Fuel Oil Deals

Thursday, August 28, 2008

I finally got the "deal" letter from my oil company, you know, where you can lock in a maximum price for the winter's fuel oil by paying up front for a set number of gallons. It arrived just before I left for last weekend, and I didn't look at it in detail until today. The deadline for signing up is tomorrow!

I normally use about 800 gallons per winter. The way it used to work was that they'd offer a maximum of say $4 per gallon maximum. So I'd sign up and hand them a check for $3200. Then when they delivered the oil, they'd charge my account whatever the price was that day, but no more than $4/gal. So if the price dropped to $3.50, I could end the winter with money left over that rolled over into the next winter's account.

The choice was to take it or leave it.

This year they've got a lot more choices, and with a head full of phlegm I'm having a terrible time trying to figure it out.

1. I can sign up for Price Cap, which means I'll pay no more than $4.99 per gallon, less if the price drops, due at delivery. I have to pay $127 to sign up for this.
2. I can enroll in EZ Pay, which spreads fuel bills over 10 months. If I didn't also sign up for Price Cap above, I'll pay whatever the price is at the time of delivery. If I did also sign up for Price Cap, the maximum is $4.89 per gallon, or less if the price drops. I don't know how they figure out what the monthly payment is, and I think it's weird that the price is lower even though they get their money later.
   
3. I can pre-purchase 800 gallons at $4.54 per gallon paid up front in a lump sum. I gather this is not a cap, it's a flat price, so if the price drops below $4.54 I lost the bet.
4. I can pre-purchase 800 gallons at $4.64 per gallon, to be paid in five equal payments, the first due up front, otherwise the same as #3.

I'm going a bit crazy trying to figure it out. The old "just plain cap" was obviously a good deal. But being offered four different prices like this is confusing. It's a bet. If I go with option #3 and the price drops lower, I lose.

It looks like their price is determined not so much by the market as by the payment plan.

I've pretty much decided on #3, IF they will let me put it on a credit card, because it'll take me 10 days at least to put together $3632, and they'll want the money by tomorrow. If they won't take the credit card, then I might go for #4.

Whatever, I obviously have to go to the oil company office today. I'm dripping from the nose. I'm breathing through my mouth not so much because of nasal congestion as that breathing through my nose makes me sneeze. Attempts to talk or laugh make me cough. But if the freakin' oil company sends out offers like this with ONE WEEK to figure it out and get your response and check back to them, well, they deserve to be exposed to my germs. So there!
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