Price Protection FAQs

Our price protection plans are available from early summer through the end of October.

Generally, it works in our members’ favor. When we looked at average prices over the past five years, here’s what we found:

• Price protection (our pre-buy or Smart Choice plans) was the best choice in three years out of five.
• In the other two years, our cash price (paying for each oil delivery within 10 days) produced the lowest average price.

There is no one type of plan that always works out the best, but no matter what you decide, you can count on us to follow through on our promises, and to stand behind our plans. Choose the plan that best matches your situation and your concerns – and call us with your questions, especially when you’re deciding which plan is right for you.

Your heating fuel purchase decisions should be based on your personal situation, and whichever option makes you feel most comfortable. Many people like our Smart Choice plan because it gives them protection whether prices go up or down. And both our Smart Choice and Easy Pay plans make your fuel bills easier to manage by spreading them evenly over eight to twelve months.

There are really only two kinds of price protection; those that fix your price and those that set a ceiling (often known as a cap) on the price you pay and also allow your price to drop if market prices go down. Payment methods for fixed and capped price programs include pre-buys (payment in full in advance) and budgets (monthly payments for 8 to 12 months).

When you purchase price protection, you should make that decision based on not just on what could happen to prices, or on the actual fixed and capped price that different companies offer, but also on the integrity and reputation of the oil dealer. Over the years, some companies have gone out of business after making very attractive price protection offers. Who you choose to protect your oil price is even more important than which plan you choose.

Yes. Vermont law (9 V.S.A.§2461e) requires oil dealers to have contracts with their suppliers for at least 75% of the heating oil they sell to their customers. We are also required to have written contracts with our members setting out our terms and conditions in plain language.

With a fixed price plan, your fuel price is fixed at one set price throughout the heating season. If prices go up, that’s great. However, if they go down, you’re stuck. You have already committed to pay a certain price and you can’t benefit from a price drop.

When you are enrolled in our Smart Choice plan, your price is guaranteed not to rise above a set “cap price” no matter how much fuel prices rise. And because this program also includes downside protection, if prices go down, you’ll benefit, because your price will drop, too.

It’s impossible for us to say. No one knows if prices will drop or surge higher over the next few months. It depends on international events that are beyond anyone’s control. It’s up to you to decide what to do – and we would be happy to discuss your options. It may be helpful to think about two scenarios. Which would be harder for you?

• You don’t sign up for a price protection plan and prices go up, or

• You sign up for a pre-buy plan and prices go down?

Our Easy Pay plans for heating oil, kerosene and wood pellets are available from July through October each year.

Our Easy Pay and Smart Choice plans are both budget plans. Instead of paying for each delivery, you make even monthly payments for eight to twelve months, ending in June each year.

Our Easy Pay plans do not include price protection; our Smart Choice plan includes a cap price.

To calculate your monthly Easy Pay payments, we use your fuel delivery record from the previous year to estimate the number of gallons you will probably use during the next heating season. We multiply the number of gallons by an estimated price per gallon. We then spread this total amount out into equal monthly payments. That way, you won’t get hit with two or three huge bills in winter. Even if you get two deliveries in one month, you'll still get one low monthly bill.

We use your fuel delivery record from the previous year to estimate the number of gallons you will probably use during the next heating season. We multiply the number of gallons by an estimated price per gallon.

Then we add in your price protection fee, which is between 25 and 40 cents a gallon. We then spread this total amount – heating oil plus price protection - out into equal monthly payments. This way, you won’t get hit with two or three huge bills in winter. Even if you get two deliveries in one month, you'll still get one low monthly bill.

Yes, it can. Remember that your monthly payment is based on estimated use. If you use more or less oil than our estimates, we may adjust your payments accordingly. You might add new insulation, and use less oil. An especially cold winter might mean you're using more oil than usual. We adjust monthly payments, as needed, in either January or February each year.

Also, if fuel prices rise more than 25 cents a gallon through the early winter, we may need to adjust monthly payments for our Easy Pay plans.

Our Smart Choice plan for heating oil - with a cap price and monthly payments - is available from July through October each year.

Our Smart Choice plan places a cap on how high your price can rise, and because it includes downside protection, anytime our daily price drops during the season, you pay the lower price.

Here’s an example of how the cap price works. You sign up for our Smart Choice plan with a cap price of $3.99, say. When we deliver your heating oil, if our daily price is $4.29 – you pay $3.99. And if our daily price is $3.49 when we deliver your heating oil, that’s the price you pay.

Not necessarily. If prices rise above your cap and stay there, this program could pay off for you in a big way. If prices go down you benefit as well, because you’ll pay our daily price, which will reflect this drop. But if prices remain stable or only go above the cap briefly, you won’t recover your “price protection fee.” Most members who choose our Smart Choice plan select this option because it gives them some protection when the oil markets become volatile.

As you might expect, our suppliers charge us a premium for offering the “insurance” that keeps your heating oil price from skyrocketing and, at the same time, lets us lower your price when market prices fall. We pass this cost along to our members on our Smart Choice plan. We do not make any money on this fee. We simply pass our cost on to our members who want the protection provided by a cap price.

Our suppliers set the cost of this "insurance" depending on the volatility in the market and how far into the future we are looking. Market volatility has increased over the past five years and our price protection costs have gone up as well. We calculate your price protection fee based on your expected heating oil use and our cost. Price protection costs between 25 and 40 cents a gallon. This is a one-time cost that is included in your first month’s payment. It is non-refundable.

You may sign up anytime between July and October. Because heating oil prices change daily, we cannot guarantee that our cap price will be the same next week as it is today.

Our fixed price plans for heating oil and wood pellets are available from early summer through July each year.

We offer a fixed price pre-buy plan for heating oil. This plan is available from May through October for the season ending June 30. The minimum purchase is 400 gallons, which is paid in advance. Our fixed price is always lower than our cap price.

It provides certainty during volatile times. If you like certainty, our pre-buy plan works best. No matter how high – or low – oil prices go, your price won’t change.

Yes, absolutely. We learned two years ago that while prices can skyrocket up, they can also plummet down. If you pre-pay, you will be stuck at the higher rate. There will be nothing we can do. Of course, because you have a fixed price, you are protected from things getting even worse.

You can’t. After your pre-buy agreement goes into force, we can’t refund your purchase because we will have secured your heating oil from our suppliers. They don’t allow us to get out of our agreement with them.

Here’s how it works. When you pre-buy your oil, we agree to buy that specific amount of oil from our suppliers at a set price. As a result, you are responsible for taking delivery of at least 75% of your pre-buy oil. If you don’t, the Co-op reserves the right to retain 60 cents a gallon on the undelivered gallons.

Here’s an example: A Co-op member pre-buys 1,000 gallons but takes delivery of only 600 gallons (60%). The Co-op has the right to retain $240 to cover its costs (400 gallons x $0.60 = $240. So please be clear about how much oil you really want to pre-buy.

Once we have delivered all your pre-buy oil, future deliveries are at our daily price. This may be above or below your pre-buy price.

Some of our members choose to buy less oil than they will need for the whole year. When that’s used up, they pay our regular daily price. This gives them some protection against rising prices, but also allows them to benefit if prices drop later in the season.