People who rely on heating oil to keep their homes comfortable want to know where fuel prices are headed. This is understandable, especially when energy prices are on the rise.
Heating oil, like gasoline and diesel fuel, is a “finished” product derived from crude oil, so its price is closely tied to the price of crude oil.
Increases in heating oil prices can be tied to many factors, both local and global. Sudden weather crises can have effects, like when a hurricane temporarily shuts down major refineries on the Gulf Coast. Geopolitical events can also lead to shortages.
Beyond actual fuel shortages, energy prices can rise based on speculation in the stock market. The conflict in Ukraine offers a prime example. Even before Russia invaded Ukraine in February 2022, energy prices were increasing in anticipation of sanctions on Russia, the world’s third-largest petroleum and liquid fuels producer. Even the possibility of disruption in the energy supply heavily influenced buying and selling of commodities traders.
On a local level, seasonal demand, operational costs, and even competition between dealers can result in heating oil price fluctuations.
Contrary to what some people believe, local heating oil companies don’t make more money when prices rise. It’s like when the cost of coffee or milk goes up. Your neighborhood grocery store doesn’t profit from higher prices.
In times of rising energy prices, customers cut back on usage and have a harder time paying their bills. In response, fuel companies often need to borrow more from the banks. In short, whether you’re a customer or a retailer, you’re hoping prices decline soon.
In the meantime, it’s a good idea to reach out to your South Carolina heating oil company. They often have programs that can ease the strain of high prices. If your heating oil company offers a monthly budget plan, you should consider enrolling. These plans let you spread your heating-oil expenses over the course of the year in equal monthly installments, making planning your fuel payments stable and cutting your winter expenses virtually in half.
One thing that always pays off no matter whether prices rise or fall is to cut your fuel consumption. There are many ways you can minimize your winter heating bills and maximize your comfort.