Last Updated: Mar 3, 2017
Heating costs are a drag on everyone’s budget during late fall and winter. When you work in an office ing you can reap some savings by setting the thermostat back for the hours you’re out of the house. But when you work from home, you need the heat at a comfortable range all day – and that get expensive! Use these tips to keep the high cost of heating oil from cutting into your profits this winter.

When the season of winter comes to mind, which sends a bigger shiver down your spine — the idea of snow and cold blistery breezes, or anxiety over what your heating oil bill will be?
If you’re like many Americans today, particularly in the Northeast, the cost of heating oil can make a big impact on your budget. For some, higher oil prices equates to less discretionary income. For others, an increase in oil prices or an a colder-than-usual winter can be devag.
And this winter, consumers who heat with oil are likely to have to spend more to heat their homes than they did last winter. According to US Energy Information Administration households that heat with oil are expected to spend an average of $378 (38%) more this winter than last winter because the retail price for oil is expected to be higher than last year and because the 2016-2017 winter is expected to be colder than last winter.

Although you can control certain outside forces that affect the price of oil — like the cost of crude oil or geopolitical unrest in oil-producing countries — there is much you can do to pay a lower price for heating oil.

Select The Best Payment Plan

Locked-In: Fixed or Capped
With locked-in pricing, a particular price per gallon is either fixed or capped for one year. A fixed rate doesn’t go up or down. A price cap sets the highest price you will pay, but if market prices go down, you pay the lower prices.  Locked-in pricing can be a win-win for both provider and customer. The oil dealer has the customer’s guaranteed business for a year, and the customer often by lower-than-market pricing. Be aware that penalty fees of $200 to $500 will most likely be charged if you cancel your contract before the year is up.

Market Price

When you pay the market price for heating oil, typically no yearly contract is involved. You are simply charged the current market rate the day of your oil delivery. Your pricing goes up and down with the market for better or worse.

When you pre-buy your heating oil, you pay preseason for your total estimated oil usage for the entire winter. The price you pay is usually competitive with the current market pricing on the day you sign your contract. If winter heating oil prices rise, you’ll come out ahead. If they go down, you’ve made a gamble and lost. If you’ve paid for too little oil, you’ll have to pay market prices for the rest of the winter season. Pre-Buy plans can be great for those who can safely afford to pay for their heating oil ahead of time and the price of oil rises over the winter season. A worst-case scenario to be considered is the loss of upfront payments should your oil company go out of business or file for bankruptcy.

A Little Homework Can Help with Payment Plan Decision
Go online and search for “home heating oil prices” followed by the year. (Example, home heating oil prices 2016.)  Look for a search result that ends in gov, or that looks like it’s from some authoritative source that isn’t an oil company. Or, call your local consumer affa office. You should be able to find information on home heating oil prices (in cents per gallon) by month for the current and previous year. Look at how the prices have changed (ie, up or down).

Also visit the US Energy Information Administration (EIA) website,, where on their homepage there’s a link to a valuable feature entitled “Short-Term Energy Outlook.” It includes information on projected heating costs for the coming winter season as well as projected winter fuel costs by specific fuel and region. A summary of winter weather forecasts for the US is also provided.

For a more comprehensive winter weather outlook, the respected Farmers’ Almanac,, has a Winter Outlook page that outlines what in store weather-wise for the coming winter. (Their prediction for the 2013-2014 winter season: Get out your woolies and snow shovels.)

Full-Service Versus C.O.D. And “Hybrid” Oil Companies

Full-service oil companies offer automatic delivery, service contracts, budget plans, 24-hour emergency service, and – less often today – locked-in payment plans. A service contracts provides for an annual system maintenance visit and for most repair parts and costs. This annual cleaning and tune-up helps optimize performance and evity of oil heating systems and can lower an annual heating bill up to 10 percent.

Some full-service providers also offer one or more discounts and/or special offers such as those for customer referrals, prompt payment, seniors and large deliveries. are expected to make regular payments within 30 days.

C.O.D. discount dealers offer heavily discounted prices, but payments must be made in cash or credit card on the day of delivery. The bottom line is that you are paying for the heating oil and hing else; i.e., no service contract, no yearly maintenance, no budget plans, and no fixed rates. If your furnace breaks downs, you’ll be paying those repair costs in full. You’ll also need to keep track of your oil tank levels; discount dealers typically do offer automatic delivery.

There are also a number of “hybrid” dealers. These companies combine features of both full-service and C.O.D. companies. Fuel oil prices are discounted – but generally as much as C.O.D. dealers – and service contracts are offered. Payment in cash or credit is due on delivery, or within five to 10 days.

Full-service dealers generally charge the highest overall prices, but many offer free or discounted one-year contracts. This arrangement can save money in the term; i.e., the included annual maintenance and tuning of heating systems save energy and money, and most furnace repair and parts are provided free of cost to the contracted customer. C.O.D. companies offer the lowest prices per gallon, and hybrid companies are generally somewhere in between.

Choose Your Local Oil Provider

Read these words and commit them to memory: Each and every year you – the homeowner – need to spend an hour or two calling at least a half dozen local oil companies; a dozen would be best. By shopping around for the best price and service, it should easily save you hundreds of dollars on your heating bills this winter. If you have a current contract, time your calls for a few weeks before it expires.

Questions should include:

The ft red flag is often established upon your ft phone call to a potential oil dealer. Did someone actually answer the phone, or did you get a busy or a voice message? Was the company rep pleasant or surly? Were you told that someone would get back to you, but no one did? If your burner breaks down in February, you’ll want to know you’ll be able to get through to your oil company immediately in order to get needed repa.

Geography, , and the age and condition of your furnace should also play an integral part in your decision . For example, someone with a 15-year-old furnace living in the Northeast might want the security of a full-service oil company with 24-hour emergency service and a contract that will protect against unexpected repair costs. In contrast, an individual living in the South with a brand new burner might be better served by paying for discounted fuel C.O.D. and simply paying to have a yearly tune-up.

When you do choose a heating oil provider, make sure that the company and its technicians are fully certified, licensed and insured. You’ll also want an established reputable company. Check with your local consumer affa office and Better Business Bureau ( for information the number and resolution of past customer complaints.

Oil Buying Groups

Consider joining an oil buying group in your area. These oil buying cooperatives use the collective buying power of members to negotiate considerable discounts on heating oil, service and heating equipment. Participating oil dealers benefit by receiving a high volume of guaranteed, repeat business and then in turn are able to significantly reduce their profit margins from those charged to the general public.

One of the larger oil buying groups is Pilgrim Oil which operates in eleven states. Membership is free, and both automatic and C.O.D. deliveries are offered. Depending on the member’s geographical location, the service contract may be free as well. Savings on heating oil average 22 to 32 cents a gallon.

Heating Assistance Programs

There are local, state and federal government heating assistance programs available for homeowners who meet certain criteria; i.e., low income, the elderly or disabled. To find out if you’re eligible, go to the “ Finder,” This is a great site that acts as a single source for locating assistance programs at all levels of government. You can get results by completing the Finder questionnaire, or by browsing by state, federal agency or category (energy assistance).

Heating assistance programs in all 50 states include the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program. LIHEAP provides assistance in paying energy bills, while the Weatherization program provides for the installation of energy efficient improvements that reduce energy costs. Each state has slightly different criteria.

Aher great source for free energy assistance is your local Electric company. NY’s Island Power Authority (LIPA), for example, offers a number of energy programs including the Residential Energy Affordability Partnership (REAP) program. Income–eligible receive a visit from a REAP technician who typically installs energy-saving measures in the home that will make the home healthier, safer and the most energy efficient… at no cost to the customer.

Remember… with a few hours of your time, you the homeowner and consumer can have the satisfaction of knowing you’re paying the best possible price for your heating oil.

Copyright 2016, Attard Communications, Inc.

To learn how to further reduce heating costs, read Business Know-How’s article Slash Heating Costs this Winter, where we list cost-free ways to lower heating bills as well as weatherization applications that lead to greater energy efficiency and savings. Follow this link to subscribe to the free Business Know-How Newsletter.

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