Heating-oil prices are plunging – but that’s cold comfort to those who thought the soaring cost of crude last summer made it wise to lock in the price of their winter fuel supply.
A gallon of No. 2 home heating oil cost an average $3.337 this week in the New York area. That’s down 16 percent from the last week of March, when home heating oil hit $3.971 per gallon, federal data show.
Prices got even higher during the summer – one dealer, Boro Fuel of Brooklyn, says that on July 31, it charged $4.89.
Homeowners who signed contracts locking in prices at last summer’s levels are out of luck, oil-industry executives say.
“It’s an ironclad contract as far as the oil company is concerned, and it’s enforceable,” said Jeff Cohn, president of Boro Fuel.
Heating-oil suppliers offer a variety of price guarantees.
Cohn said that instead of fixed-price contracts, his company offers price caps so customers pay a bit more for their fuel in exchange for a promise prices won’t rise above a certain level – this year, around $4.30 a gallon.
Even with the price plunge, Cohn said some customers might not mind paying extra for the guarantee.
“It’s my adage that you don’t get hurt by falling prices – you get hurt by rising prices,” he said. “You’re trying to protect yourself if prices go back to $4.50.”