March 29, 2020

Low oil prices spark gripes Buyers locked in too soon, they say

LEWISTON – A drop in home heating oil prices is good news for most customers – but not those who locked in at higher rates.

Customers who buy heating oil based on the daily market rate are benefiting from prices that slid to lows that have not been seen in months.

Those who planned ahead by locking into a rate for the coming winter are the ones who are complaining, said Les Thomas, owner of Cash Energy Fuel.

“A lot of folks up in Lewiston-Auburn have been locked in at $2.59,” he said. “They’ve been asking us if we know of any way to get out of it. It’s a tough situation.”

On Monday, the statewide average price for No. 2 heating oil was $2.25 per gallon, a decrease of 23 cents since Sept. 5, according to a survey by the governor’s Office of Energy Independence and Security. The lowest price in the survey was $1.96.

No one could have foreseen such a drop in September, said Bill Fielding at Fielding’s Oil Co., who’s heard from plenty of frustrated lock-in customers.

He thinks people don’t understand the mechanics of a lock-in.

“As soon as you commit to me, I commit to my supplier that very same day” for the going price at the moment, he said. “$2.50 was a great price in May. You wouldn’t be calling me if it was $3 a gallon, would you?”

Monday’s average heating oil price was 31 cents lower than last year at this time, when petroleum prices were driven up by Hurricanes Katrina and Rita.

But Mainers shouldn’t plan on prices staying this low, said Beth Nagusky, director of the Office of Energy Independence and Security. “I think people realize it’s like gambling,” she said. “With oil prices, the market is very volatile.”

A late-season hurricane, more trouble in the Middle East or a particularly cold winter could send prices upward again.

“You never know what the market’s going to do. This could be a blip or it could be a trend,” said Jamie Py, president of the Maine Oil Dealers Association.

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