Eastern Mass. Heating Oil Company Weathers Hardship
The rollercoaster of oil market volatility doesn’t just affect heating oil consumers. Home heating companies feel the pinch, too, and more than a dozen saw their demise in the wake of the 2008-2009 winter season. High summer prices, broken lock-in contracts and the economic meltdown have made it difficult of late for companies to stay afloat.
In exploring what makes a heating oil company better equipped to weather hardship, we found an article from WickedLocal.com on W.H. Riley & Son, a successful, family-run home heating business in Taunton and North Attleboro, Mass.
W.H. Riley & Son’s president, Mark Allen, upholds a family business. In 1873, Allen’s great-great-great grandfather, William H. Riley, teamed up with his son, Elmer, and started a wood fuel and construction business. Today, Allen’s sons, Matthew and Jonathan, will carry the business to its seventh generation of being family owned and operated. The longevity of the company is remarkable alone, but especially so because of the brutal oil market and changes in fuel infrastructure since the 19th century.
So what made W.H. Riley and Son less susceptible to the massive swings in oil prices over the past couple of years? The difference between this year’s prices and last year’s is remarkable: Heating fuel costs are about 36% lower than this time last year in New Hampshire.
The answer is diversification. Allen says that today, fuel oil sales account for just above 75% of his business. As time went on and technology progressed, the company added coal, oil, diesel, propane, and recently, AC equipment. Eight hundred of his current customers use kerosene in their mobile homes. He’s also in the business of supplying gas-powered fireplace logs, which are often a fixture in new homes.
Allen told Wicked Local that demand is down, and not just on a year-to-year basis. In 1973, his average customer bought and used 1,200 gallons of fuel a year. Today the number is closer to 800 gallons. However, those numbers may be skewed by the fact that furnaces today are remarkably more efficient that those of the past, and therefore don’t require as much fuel.
The next few years could be hard for both heating fuel customers and the companies. After a tumultuous economic year, many consumers will find it hard to cover the expense of keeping warm. As we’ve previously recommended, weatherizing projects for your home are a cost-effective way to lower your utility bills and create a hedge against the volatile oil market.