About Heating Oil Pricing: Part 2 of 2

In Part 1 of our About Heating Oil Pricing post, we talked about the many factors that make predicting oil prices a nearly impossible task.

That unpredictability makes it difficult to determine the best way to pay for your oil in a given year – which is why we offer several options for doing it. Here in Part 2 of our post, we’ll talk about those options in more detail.

Heating oil pricing options

When it comes to choosing a way to pay for your heating oil, the most important factor to consider is your tolerance for risk. At Vaughn Oil, we offer three basic ways* to pay for your heating oil: market price, pre-buy, and price cap. Each has its own advantages and disadvantages, as you’ll see below.

• Market Price – The market price for heating oil changes from day to day, with no high- or low-limit. If you choose to pay market price, you’ll benefit from a drop in oil prices without paying a fee – but you’ll also pay more for your heating oil when the market rises (usually during the heating season, when demand is highest). Market price is the least predictable of the three options listed here.
• Pre-buy – When you buy your heating oil in advance, you’ll pay the same price for your heating oil throughout the heating season, no matter what happens in the market. By pre-buying your heating oil, you’ll benefit if prices rise, but can’t take advantage if prices fall (during an unusually mild winter, for example).
• Price Cap – With a Price Cap, you’ll be shielded against a rising market while still being able to take advantage of price drops as they occur; you will, however, pay a fee for that luxury (the Price Cap fee covers the cost of insurance to protect against falling prices when we purchase oil from our suppliers for the season; we don’t profit in any way from collecting it).

As we mentioned earlier, much of the decision about which plan is right for you depends on your tolerance for risk. If you like certainty, a pre-buy might be best; if you have a little gambler in you, market price might be a better option. If you don’t mind paying a fee for your pricing plan, a Price Cap will give you the best of both worlds.

If you’re already on a pricing plan, we recommend sticking with it rather than trying to jump from one program to the next trying to time the market.

Need help in choosing a heating oil pricing plan that’s the right fit for your family? Contact us today – we’re happy to talk about it. Price Cap enrollment is open now – even if your current plan has not expired. Contact us to enroll today!

*Each of these options can be combined with other Vaughn services like our Monthly Payment Plan, Auto Pay Plan, and E-billing to make your heating oil buying experience convenient and hassle-free. Contact us to learn more.