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Laura Feghali, Real Estate Pro in Stamford, CT

Is it wise to purchase home heating oil at a guaranteed fixed rate right now or pay whatever the daily rate is at time of delivery this winter?

Asked by Laura Feghali, Stamford, CT Fri Sep 30, 2011

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There is no right answer to this. It is a gamble either way. There is no way to know what the prices will be in a few months, so you can't know which way is better. The only guaranteed advantage to a pre-buy is that you will have a fixed number that you can base a budget on. If that is worth the potential to be paying more than the going rate later, then go for it.
In past years the prices have followed a seasonal price curve and were more predictable, so it was easier to make this decision. The last few years the prices have been so volitile, there is no basis for even a guestimate of the prices this winter. Talk to the buyer at your oil company. I have gotten good advice from mine in the past regarding this.
1 vote Thank Flag Link Fri Sep 30, 2011
You certainly want to shop around , but I feel locking in has a number of benefits. In addition to securing a price that you can budget for, it creates a relationship with an oil company which should serve you well if you have any problems with your furnace or if you need emergency deliveries during the winter months. Some companies will set the price as a ceiling price and will offer the oil at a lower price if their cost goes down, which would protect you if prices came down significantly.
I would suggest paying all advance payments with a credit card to give yourself extra protection should the oil company go out if business before making good on their commitment to you.
1 vote Thank Flag Link Fri Sep 30, 2011
Be cautious, it may be better to lock in a rate sooner than later, but shop around. As winter approaches oil prices tend to rise and not fall based on the demand and dependency of home heating oil.
1 vote Thank Flag Link Fri Sep 30, 2011
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