Date: October 25, 2022
On October 5, OPEC announced it was slashing production by two million barrels a day. Within just three days, our suppliers had increased the cost of heating oil by 70 cents per gallon. That’s right, 70 cents per gallon. Today, that increase is over $1.00 per gallon. It frustrates the heck out of us.
This is not just impacting heating oil. Natural gas, electricity, and gasoline are moving higher as well. The rush to transition away from fossil fuels before renewable options are widely available has left us more vulnerable to international supply reductions, and the price volatility they generate.
Of course, things could turn around. We saw prices spike in spring only to drop by over a dollar in summer. There are just too many variables to know where prices will go from here.
A couple of things to bear in mind:
I will try to keep you informed as events unfold. There are many things we can’t control. But we will always prioritize our existing customers over new ones. We will go the extra mile to keep you safe and warm. And we will be there when you need us.
Date: March 10, 2022
Dear Valued Customer,
As you can expect, we’ve been getting many calls from customers around two connected issues — the surge in fuel prices, and concerns over fuel supply. People are astounded by how much prices have risen, and how fast, and they also want to understand why this has occurred. They are also concerned that there will be interruptions in supply that will cause them to run out of fuel to keep their homes and families warm and safe.
Energy prices for all fuels – heating oil, natural gas, propane, diesel fuel, and gasoline – were already higher prior to Russia’s invasion of Ukraine as the world’s economy began to emerge from the worldwide COVID-19 pandemic. For example, energy prices increased as demand for all fuels rose as manufacturing facilities resumed production of goods, as trucking of products increased, as people slowly returned to work and as businesses like restaurants reopened.
And then, given that we live in a global economy when the Ukraine crisis escalated, it shocked the global energy markets sending crude oil up over $110 per barrel.
To give you a sense of how this affects us and you, on March 2nd, we received a notice at night from our heating oil suppliers that their prices were going up 20 cents the next morning at 8 am. Then, on March 3rd, they went up three more times for a total of 60 cents per gallon in just 24 hours, ultimately increasing more than $1.25 per gallon by the end of the week.
No one knows where things will go from here. One thing we can tell you is that we dislike this situation as much as you do. Some people are under the misconception that when prices rise, we make more money. The opposite is true. Customers may cut back on usage, some have trouble paying their bills, and our account receivables skyrocket. Meanwhile, we must pay our employees, cover our rising overhead costs, and pay our fuel suppliers in less than 10 days or possibly lose our ability to pick up heating oil for our customers. This requires us to borrow much more money than usual from our bank. This is an extremely difficult situation for everyone.
One thing you can count on, though, is that barring a global catastrophe, we will not let you run out of fuel. We have been in business for over 77 years and we have very strong relationships with suppliers and financial institutions. We are already receiving calls from customers who are with other heating oil companies that do not have the same history or sound financial strength as our company. These customers are saying they are unable to get deliveries for 20 days out. You don’t have to worry about that with us.
If you have having trouble paying your bill, please call and talk to us. Many times, we can work out something to give you more time to remit payment. Our goal is to keep you warm and worry-free even in these uncertain and trying times.
Like you, we are eager to see energy prices start dropping. Until then, trust us to care for all your energy needs, and please join us in praying for a swift end to the humanitarian crisis and war in Ukraine.