We know many of you are looking at the energy cost increases and wondering when this will end, and I don’t blame you. Our goal is to keep you in the loop as much as possible, even though the situation remains very fluid.
Last week, our suppliers again raised prices over 65 cents per gallon over a few days. The reasons are complicated and seem to be affecting heating oil and diesel fuel much more than gasoline.
The driving factor is that both are in abnormally short supply now (heating oil and diesel are pretty much the same things). In fact, if you look at prices on the commodities exchanges, they show heating oil at a dollar less than we can get it at! That never happens. It’s called “basis blowout” and reflects a disconnect between the markets and actual supplies.
The good news is that the supply issues are happening because the markets expect heating oil to go lower by a fair amount over the next several months. Fuel suppliers are reluctant to purchase fuel now and get stuck with higher priced product. The bad news is that it is causing prices to be artificially higher now, and no one really knows for sure what will happen with the Ukraine war. The war is also causing a historic amount of diesel fuel to be shipped to Europe, which is impacting heating oil as well. By the way, we are seeing the same kind of surges in Natural Gas and electric costs.
We want to urge people to get on our budget billing program, which allows us to spread your fuel payments over 12 months. If prices do stay high next year, it will be much easier to manage your bills if you don’t have to pay for all of your deliveries in just 5 months of fall and winter.
There is no way of knowing whether prices will rise or fall going forward. However, we will do our best to keep you in the loop as things emerge.
If you have any questions, don’t hesitate to call our office. We are here for you.
Dear Valued Customer,
Once again, we’re seeing energy prices surge across the board. We know how painful that can be for our customers. It’s painful for us, as well.
Gasoline has risen more than a dollar more per gallon vs. a year ago. Natural gas prices have skyrocketed more than 150%. Crude oil prices have climbed above $100 per barrel, a level we haven’t seen in seven years.
The cost of electricity has not been spared either. Higher natural gas prices result in price hikes for wholesale electricity because of heavy reliance on natural gas-fired power plants.
People sometimes misunderstand how negatively all this impacts us, as well. We don’t make more money when prices rise like this; we make less. Think of it this way: it’s like when the cost of coffee, milk, or oranges rises. It’s not the local grocery that is profiting. (That’s left to the Wall Street investors.) Our customers have a harder time paying their bills. They reduce expenditures. We need to tap into our lines of credit more. Our phones light up with questions. So the sooner energy prices drop, the happier we’ll be.
In the meantime, please talk to us about things we can offer to help you reduce your energy costs, or handle payments more easily. And if you are having trouble with your bills, please call us. We can generally work with you if you reach out before you fall behind.
We’ve been in business for many years and have deep roots in the community. We have secure access to supplies. We are doing everything possible to ensure we can deliver — even if other companies cannot — no matter the cost or difficulty we face.
We thank you for your understanding and we appreciate your loyalty. As we’ve done quite a few times in the past, we will get through these tough times by all working together.