#2 Home Heating Oil is consumed by over 680,000 end users throughout Connecticut. 545 Million gallons are burned annually in CT. #2 fuel oil is used primarily for heating purposes but can also be used for machine operating in commercial use. It is estimated that 40% of Connecticut runs on home heating oil.
The majority of consumption for #2 oil takes place in the winter months from November to March. Some people may also use oil to heat their hot water tank. In this situation these users will need delivery during the summer months, but far less than they will need in the winter. There are also homes in Connecticut that use a different heating source to heat their homes but have oil for the hot water.
First Time Buying Oil?
If you are new to buying heating oil than there are important things that you should know. There are many heating oil companies in Connecticut and finding the right company is worth spending a little time to investigate. Oil dealers need to have a HOD license provided by the state in order to deliver oil. The state performs background checks on delivery drivers to make sure that they are not a danger. Oil companies are also required to perform background checks on their drivers driving histories as mandated by the DOT.
Different Delivery Options
There are a few different types of delivery options that customers can receive. The two most basic are "cash on delivery" also known as COD fuel oil delivery, or automatic delivery. Cash heating oil customers in CT monitor their tanks usage by looking at the gauge and call the oil company when they need oil. Most oil tanks are 275 gallons, but could also be 330 gallons or any combination or multiple of the two in bigger houses. Some houses have in ground tanks that could be 1000 gallons. In a normal 275 gallon tank, customers usually purchase oil when their tank is between 3/8ths and 1/4. Because their is "time to buy" so to speak by monitoring the gauge and usage cash oil customers are given the advantage of waiting until funds are available to buy oil, and also checking with their oil company to see what is happening with oil prices. Prices fluctuate daily, so unless you are an oil traders knowing the inside scoop is unlikely, but many C.O.D customers attempt to track trends to make a more knowledgeable buying move in vain. The downside to cash on delivery or will call buying as it is often called, is that in the event the customer forgets to monitor their own tank they run the risk of running empty as it is not the responsibility of the fuel dealer. In order for customers to rest assured that the oil man will deliver when they need customers should go with the automatic delivery plan.
Because Connecticut is one of the colder states in the union, winters can be brutal. With snow sleet and frigid temperatures outside staying warm on the inside can be a matter of life or death. This is why many oil consumers across CT opt for the automatic delivery set up. To become an automatic delivery customer companies usually require that the customer fills out a credit application and signs an agreement that oil will be delivered on an automatic degree day basis. Credit terms are extended to auto customers, usually 10 days after delivery. The advantages of auto delivery are more than just payment terms. Automatic delivery is the most efficient way to get your oil delivered. The companies usually shoot for making a deliver around 180 gallons, so don't have to worry about running too low, or running out at all. By keeping a steady flow of oil in your tank this also increases the longevity of the furnace.When choosing a delivery company you should know which option best suits your needs. Some companies only do automatic, while other companies only do cash deliveries. So in the event you wanted to switch one way or another getting a company that does both is a better choice. Sometimes prices of oil may very between the two delivery plans, so knowing exactly what you are paying before you sign up is important.
To Lock-In or Not to Lock In? That is the question...
The fuel oil market usually moves with the crude oil market as heating oil is a derivative, but not always. Spot pricing or variable rates are the most common pricing option with oil heat. By buying on a fluctuating rate schedule you know you are getting the current rate. The downfall of this is when the prices go up, you bill goes up too. The great benefit is that when prices go down your bill will go down too. In 2008 as an example home heating oil prices escalated to the highest that they have ever been in Connecticut. Many consumers locked in at rates around $4+ a gallon. Than the market crashed and oil went into the $2 range so those that locked in lost literally thousands of dollars of what they could have bought buying on the spot market. This was one of the most extreme occurances in heating oil price fluctuation that has occurred over the last few years.Boiler and Furnace Maintenance
It is a common misconception in the world of buying heating oil, that full-service automatic companies are service experts. In fact many companies that claim to be in the service industry are really just heating oil dealers fronting as mechanics and are not reliable. On the other hand, there are full-service companies that are excellent service providers with many talented CT S licensed technicians, but when it comes to delivering oil they fall short. Service is an important factor when choosing an oil company. Another common misnomer when choosing a fuel oil provider is that if the company does not do service in house, than you shouldn't buy from them. Nothing can be further from the truth. The key is to make sure that they have a reputable service company that has been in business for many years which they can refer you too for a service contract and cleaning. Many smaller C.O.D and hybrid oil companies, do not do service but refer customers to HVAC contractors. If you have an air condition, than you want to make sure that the service company they suggest does AC work in the summer time too. Not all cash heating oil companies in Connecticut have a service company they can refer you too. So you should be sure that they do before you elect to become one of their customers. And even if they do have a heating technician they can suggest, make sure the company is in good standing with the BBB and they have the proper S-licenses needed to work on your boiler or furnace. What is the Price of Oil Today?
It all boils down to dollars and cents. It is the same oil, brought in from the same ship and sold from the same wholesaler to the oil dealer. Than why is their such great price differences from oil company to oil company. Good question. This usually boils down to 2 things. The profit margin needed for the oil company make money after they pay their expenses, and the extra "fluffing" oil companies charge so they can sit in the Bahamas on a beach while their customers are struggling to pay the oil bill in CT with near zero temperature. For the most part prices are near to each other. If you are shopping for a Tropicana orange juice, than one super market may sell it for 50 cents higher than grocery store across the street. Does it make sense to cross the street for 50 cents savings? Well for 1 bottle maybe not, but if you buy a bottle a week that is an extra $26 savings a year that you could buy two T-bone steaks with. That still may not be motivation enough to for some but oil is the same thing on a much larger scale. While the price difference may seem small on a gallon amount, multiple that times the amount you consume a year and the savings is shocking. Now do the math over the course of 5 years or how ever long you plan on living in your home and you can see that price does matter. Simple math on $0.50 per gallon difference multiplied by 1000 gallons a year is 500 bucks. If you are living there for 5 years = $2500 savings which is a nice down payment on a new car.
