When is the best time to buy heating oil?

Posted
Tuesday August 16, 2011

BRATTLEBORO -- Buy heating oil today or buy it tomorrow or buy it three months from now?

Even though temperatures have been hitting 90 degrees lately, that's a question many a homeowner is grappling with.

And with the price of gasoline dropping, could the price of heating oil be going down as well?

"They don't always run in unison," said Casey Cota, owner of Cota and Cota in Bellows Falls.

On the New York Mercantile Exchange, home heating oil prices dropped from $2.94 cents a gallon to $2.87. But locally, the retail prices are ranging between $3.60 and $3.65

The drop in price may sound good, said Cota, but prices actually rose at the beginning of last week.

It's anybody's guess whether the price of heating oil will go up or down by the time the temperature drops, he said.

"If you're crystal ball is any better than mine ..." said Cota. "It's a hard call."

Last year, heating oil hit $4.59 a gallon but dropped to $2.25 by January of 2011.

The best thing a consumer can do is buy into a price cap program, said Cota.

"The market is so volatile, so don't get into a fixed-price program," he said. "Protect yourself on the upside, but if the market goes down you can benefit from a lower price."

To be eligible for a cap program, consumers have to buy their fuel upfront. If there are any funds left over at the end of the season, clients can either ask for a check or can roll it over into their next year's account.

"We are not trying to make an exorbitant profit," said Cota. "We're just trying to pay our employees and keep the lights on. We're all in the same boat."

As with fuel costs, there is also uncertainty when it comes to how much money will be available for fuel assistance.

Last year, the average Low Income Home Energy Assistance Program client in Vermont received $866. If the budget proposed by President Barack Obama is approved, that could be cut to $400.

"We don't expect Congress to start marking up their draft budgets until after Labor Day," said Richard Moffi, who oversees LIHEAP for the Vermont Agency of Human Services. "They're supposed to go into effect on Oct. 1, but there is no way they're going to make that date."

He said the uncertainty puts stress on Vermonters in need of assistance, AHS staff, fuel dealers and organizations such as Southeast Vermont Community Assistance, which is the local administrator of LIHEAP.

Last season, there was no budget for the Department of Health and Human Services until March, when the winter was drawing to a close.

Last year, Vermont received $25.6 million. If the Obama suggestion is accepted, that amount will go down to $11.6 million.

Moffi said he expects to see 42,000 Vermonters enroll in the program this year.

That's up from about 40,500 last year.

"The program usually grow 3 to 5 percent a year," said Moffi, due to aggressive outreach and changes in policy that increase the numbers of those who are eligible.

Even with a cut in funding, said Moffi, there is no expectation that anyone will be cut from the program. It just means they will receive less help.

That's especially hard on seniors on a fixed budget, he said.

But the fuel assistance program is now income matched with 3SquaresVT, said Moffi, meaning if their fuel costs go up, they may be eligible for more food assistance.

Those who would like to enroll in LIHEAP should call 1-800-479-6151.

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160.


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