It's a promise!
Heating Oil Contracts and You
You never know what the market's going to do. Or how world events or extreme weather may affect energy prices of all kinds. That's why price protection programs with your heating oil dealer can help you plan for the winter ahead.
Like any contract, both sides have to fulfill their ends of the bargain. The dealer promises to provide the fuel to keep you warm. You promise to pay an agreed upon price.
Fixed-Price Contracts: a contract to purchase a set amount of gallons of fuel for a fixed price during a specific period of time. Payment is usually required up front, since Maine law requires the dealer to secure the fuel up front to ensure that it will be there when you need it.
Budget Fixed-Price Programs: a contract to establish a fixed price for your heating fuel needs and a budget payment plan with equal amounts spread out over a specific period. Again, since the oil dealer must purchase the fuel up front - in essence, loaning you that money - this may cost a little more.
Downside Protection Plan: a contract to lock in a fixed price that can go lower if the market price should drop unusually low during the winter. Much like an insurance program, this downside price protection typically carries a premium price as it costs your oil supplier more money to have that same protection from wholesale suppliers.
Remember that contract prices are usually offered early in the season, and not all dealers offer fixed price contracts.
When you sign a contract you're obligated to honor it!
When you contract for a fixed price, unless you have downside protection, you are required to pay the agreed upon price to your oil dealer even if the market price drops below your fixed price. That's the law, and failing to abide by the contract may result in your paying a costly penalty.
Nevertheless, your contract brings you a number of very real values: You know your home will be warm all winter. You can accurately predict what your heating costs will be. And most important, you have a valuable relationship with a professional oil dealer who is committed to your comfort and well-being. If there's ever a question or a problem, all you have to do is call.