Vermont Heating Oil Pre-Buy Programs Gain Popularity

Posted by Kristy Kershaw on September 22, 2009 at 12:51 pm

Consumers across Vermont are opting for pre-buy programs. (image: dustydavis.com)

On Sunday the Times Argus in Vermont reported a significant increase in demand for pre-buy oil programs throughout the state. As winter approaches, many customers are turning to pre-buy programs in the hopes of avoiding a situation like last year, when the bottom fell out on oil prices but many people were still locked into high-priced contracts. With the price of heating oil at 50 percent of where it was last year, pre-buy programs are setting a record.

Pre-buy programs are one of several payment options that heating oil consumers have, which allow consumers to pay upfront at the beginning of the season for an agreed-upon amount of heating oil at a discounted price. An alternative is a budget plan, which tends to come at a slightly higher cost but spreads payments out over many months at a locked-in or variable rate. Budget plans also come with an option to protect against price fluctuations, though again, typically at a higher cost.

One record-setting program is at Trono Fuels, where, according to Peter Trono, even some customers who had already started making installment payments as part of their budget plans switched to the pre-buy program to take advantage of the $2.40 a gallon price.

Across Vermont, interest in heating oil pre-buy programs has increased. Tim Allen, of Allen Brothers Oil in Westminster, told the Times Argus that he had seen more interest in the pre-buy program this year after last year left many customers upset last year when prices plummeted but their price remained high. Allen said customers didn’t really understand that the fuel oil companies were also stuck with oil that had cost them more than it was currently worth, since oil companies physically buy oil at the price they quote customers, and can’t change the price of it afterward.

According to the Vermont Department of Public Service, the average pre-buy price in August was $2.58 per gallon. Matt Cota of the Vermont Fuel Dealers Association predicts that due to the recession, prices should remain low. And while there are never any guarantees, Vermont heating oil consumers should have a much easier time, pre-buy or not, than they did last year.

Read more about choosing heating oil vendors and selecting among payment plans and contract options in this HeatingOil.com article.