Heating oil prices are half of what they were last fall. Why are so many stuck paying the hiked-up prices?There's good news for consumers regarding heating oil rates. The Energy Administration announced national prices for March 2009 as low as $2.22; the lowest price since 2005. July 2008 prices were as high as $4.71.
The recession has caused oil prices to fall dramatically, which is good news for those living on a budget. However, some consumers dependent on heating oil are still paying last fall's prices. Fearing that heating oil prices would continue to climb, many consumers opted for a locked-in rate. Ken Glasser locked in at $4 a gallon last August to heat his Boston home. He had his friends and family join in on the fixed-rate. "Some years you're the dog and some years you're the hydrant," Glasser reports to NPR.
The locked in contracts are extremely difficult to break, most requiring a a large termination fee. Buyers remorse is a current theme among fixed-rate customers. In the past decade, fixed-rate customers have made out better than month-to-month customers. Unfortunately, a contract is a contract. Jim Colloura of the New England Fuel Institute says"It was offered as a service to the customer. It was no malicious intent here. … I think this is a learning curve for everybody."
This year's locked in prices are set to be around $2.50, a lot better than last year's. In any case, it is highly unlikely that heating oil prices will come close to last fall's average.
