The falling price of fuel oil is good news for people who didn't opt for fixed-price heating oil contracts.
Consistency is the key to purchasing fuel over the long run, according to Joe Mirabito, president of Mirabito Fuel.
"If people are consistent in what they do, their hedging will result in savings over time," Mirabito said Friday.
He said his company offers two fuel purchase plans _ a cap program and a fixed price.
In the cap program, the customer pays up to but not more than an amount set when the contract is signed.
There is a fee included that allows the company to purchase what amounts to insurance against drops in the price of oil. Mirabito said the fee for fuel oil is $300, and the fee for propane is $200.
The fixed-price program involves purchasing the fuel for the entire season at the one price, Mirabito said.
"When someone gives a fuel dealer their payment, he has to go out and buy fuel through a contract with the supplier," Mirabito said. "The customer actually owns the oil."
Mirabito said he purchases his fuel for his home and businesses on a fixed-price plan because he has found that over a 10-year period, he has saved money consistently.
"People that were in the fixed-price program last year hit a home run," Mirabito said. "They locked in a price that was about $2 lower than the price of fuel during the winter.
"This year it is kind of tough, but look at what you have saved in the past and it all evens out," he said. "That is why I am a fixed-price guy."
Gennaro Pellegrino, of Meredith, said he purchased his fuel through a fixed-price program with C. E. Kiff Inc. of Delhi.
"I locked in at over $4 a gallon," Pellegrino said Friday. "I go with the fixed-price program every year, and this is the first time I have ever taken a beating, but winter is not here yet, and we will still have to see what happens to the price as the weather gets colder."
Pellegrino said under Kiff's cap plan he would have had to pay a 30-cents-per-gallon surcharge to cover the cost of the insurance.
Tony Contello of Walton said he tried to lock in a fuel plan, but at the time he was pricing, he couldn't afford to get in.
"The price was $4.95 a gallon, and I had to purchase a minimum of 400 gallons," Contello said. "I didn't have the money right then, and now I am glad I didn't. We just topped off the tank at the time."
Rudy Ballard, of Reinhardt Home Heating, said the majority of his customers are in cap plans.
"Back in the early spring when prices were so exorbitantly high, we had people who wanted to lock in the price fearing that it would go higher," Ballard said. "We told them that we did not offer a fixed-price plan, but some were so uneasy they insisted. We had about 10 or 15 people who went with the fixed price, and some of them have called and complained."
The Empire State Petroleum Association, which represents 300 companies including independent petroleum marketers providing heating oil and related services, has put out a fact sheet about fixed-price delivery contracts:
ä In response to consumer demand, many heating oil dealers began offering price protection programs to protect their customers from oil price swings.
ä When a consumer decides to purchase a fixed-price heating oil contract, the heating oil dealer enters into a locked-in contract with a supplier to ensure that the necessary amount of heating fuel at the agreed-upon price will be available to fulfill the contractual obligation with the consumer. Unfortunately, suppliers do not lower their prices to heating oil dealers when the market price moves below the contract price.
ä When the price of heating oil rose dramatically last year, fixed-price consumers benefited greatly. They were able to receive their fuel at the lower fixed prices they agreed to earlier in the year in their fixed-price contracts, and when their dealers signed contracts with their suppliers at those prices.
