 |
|
Price Protection Program
Questions & Answers
|
What is the price of oil today?
As of this writing (July 9th) the price is 4.499 per gallon
if you are on a budget or pay within 10 days. (This past
winter oil has increased $1.00 per gallon from September to
the end of April, and another .80 cents higher –with most of
the increase in May.)
What if I do not want a program this year?
No problem, you do not need to notify us. We will continue
to deliver your oil on an automatic basis as we have in the
past. If you are a will-call customer we will still wait
for your phone call to make deliveries. However we strongly
urge you to stay on the budget program.
Why is the insurance/downside protection so
expensive?
It is price volatility, and the price of the product. Since
March, all energy prices traded on the NYMEX have seen wild
price fluctuations. On any given day the price will trade
as much as 15cents in either direction. One day this spring
we had a 30 cent increase! Because even these traders do
not know the direction oil may go they have added these huge
premiums to protect themselves. They feel their risk is
substantial, therefore the large premiums.
How long will I be able to lock in a price?
We are planning to have an offer thru August. With the
price potentially changing as we purchase more oil.
I was on a fixed price budget plan last year, what
happened to those plans?
We feel the risk will be to great for you as a consumer and
to us as your dealer. These price contracts are done
primarily in good faith, meaning we cannot cover every
contingency that may arise. What if the price goes down
$1.00 per gallon or more. Would you be willing to honor
your gallons and pay the higher price? Two years ago fixed
contracts lost out, and this past season they made out, by
not paying the protection fee. With the uncertainty of how
high or how low prices could go the risk is to great.
I filled out an automatic withdrawal form last year,
will I be able to do that again?
Yes. Each year we have to receive a new authorization
because the amounts typically will change and the agreements
you sign are for only 1 year. If you chose a price
contract a form will be sent with the contract. If you
choose to just stay on a budget foregoing any price
contracts your August budget bill will have a new
authorization form enclosed.
I still have a credit balance from last year’s
budget?
For those that fortunate we have taken your credit balance
from the total due for the new year, and divided that into
the 12 budget payments. |
|
