When it comes to buying your community association's fuel and heating oil, if your goal is to pay rock-bottom prices well below what everyone else is shelling out, forget it. Everyone knows today's prices are high—and while we can all hope for a decrease, the smarter approach is to prepare for another season of high fuel costs.
But you do have options. Of course you can shop around and find the best deal, but you can also choose a delivery and payment system that best suits your needs.
Fixed vs. Floating
There are two basic options a building or association can choose from when deciding how to be billed for oil: fixed rates and floating rates. A fixed rate means the building will buy its oil at specified price that will not change over the length of the contract. Buildings that choose this method may have to commit to buying a certain amount of oil over the course of the contract.
Floating rates mean that the price paid for oil will be based on the market rate at the time the oil is purchased and delivered. That means the price paid can go up or down with every delivery.
"They can get a delivery on August 2nd, and if they get another delivery on August 19th, they can be paying a different price," says Rodger Loughlin, an owner of Ferrantino Fuel in Brooklyn, New York. "It can go up, and sometimes it can go down."