Heating oil providers: ‘Rough winter’ ahead

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"It's a chain reaction," Daphne Brinser, office manager for Reeder Brothers Fuel Services Inc., said of rising home heating oil prices. "There are added gasoline expenses, food prices are increasing and diesel prices are going up."

Brinser said this winter's trend probably will be for customers to buy oil for homes in the minimum amount of 125 gallons, instead of people completely filling their home oil tanks.

Locally, the cost of home heating oil reportedly rose from about $2.30 per gallon a year ago to $4.46 per gallon now, a 94-percent increase, according to those surveyed Tuesday by the Sun-Gazette.

"It's going to be a rough winter," predicted Eric Hussar, division manager of Farm and Home Oil Company.

Heating oil is a petroleum product used by about 8.1 million people to heat their homes, according to the Energy Information Administration. Other sources of heat include natural gas and electric.

Different factors in the market determine what the home heating oil cost will be, Hussar said. "There are a lot of external factors that help to determine the price, too."

Although this winter is expected to be difficult, many of the companies have "budget," or payment plans, where customers pay a smaller monthly amount throughout the year to cover the colder heating season.

"We allow our customers to send money in each month and that gets put on their account," Brinser said of the company's "budget plan."

She said about half of her customers opt for that option, while the other half pays for oil as they need it.

Farm and Home Oil Company offers a similar plan, plus a price-protection plan for their customers.

"One of the ways to protect yourself with any type of energy is check with your suppliers to see if they can provide you with a type of price protection," Hussar said. "It gives you insurance and piece of mind and you will be locked in a certain rate."

Hussar said that if a customer gets on a price-protection plan, it's important not to flip-flop. "If you flip-flop, you just gamble," he said.

But there are other ways to save on home heating oil costs, or any heating costs, according to Hussar. "It's important to upgrade equipment," he said. "Whatever the source of fuel you use, get it tuned up so it maximizes efficiency.

"When it (heating oil) was inexpensive a few years ago, efficiency wasn't a factor, but now it is," Hussar said.

While some people are struggling to pay their oil bills, others are making the switch to natural gas.

"Two or three of our customers have called us and requested no fuel oil be delivered because they had natural gas heaters installed or they are burning wood and they will call us if they need any oil for backup," Brinser said. "I understand the position the customers are in. You have to take care of you."

Hussar said he did not see people switching to natural gas and other heating methods. "The cost benefit of switching is not that high," Hussar said. "The return on investment is not that high."

Homeowners "have to look at their equipment and make a decision about upgrading," he said.

Lissette Santana, spokeswoman for PPL Gas Utilities, said the company does not track where its new customers come from. "We do hear people mention they are switching because of price differences but we don't track it."

In April, natural gas prices clocked in at $14.30 per thousand cubic feet, according to the Energy Information Administration.

Santana said that as part of the company's customer education efforts, energy saving tips are offered with their monthly bill.

For more information about home heating oil, natural gas prices or making a switch, visit www.eia.doe.gov.