Switching oil dealers this year could save money -- if the new supplier is reliable
Your doorbell ring. It is a friendly representative of a home heating oil dealer -- not your own -- who wants your business. When he says he can undercut the price you are paying, he tempts you. Should you switch?
Maybe, say oil dealer executives. But they warn customers to weigh the options carefully before switching companies to save a few cents on the gallon. They point out that some of these dealers -- small operations using perhaps no more than two or three trucks -- cannot guarantee customers will actually receive the promised oil or ensure their price will remain substantially lower than the bigger companies.
Douglas Wake, energy specialist with New York City's Department of Consumer Affairs, says that despite alluring prices, "from a customer's point of view it seems a lot wiser to deal with someone whose been selling you home heating oil for the past 10 years without fail than to take a chance on a dealer you don't know."
Nevertheless, Mr. Wake also cautions against notm shopping around for the best buy because there clearly is stepped up competition this year as opposed to last. "Last year, you really couldn't get if from anyone else. You had to buy it from the person you were used to dealing with."
"Because of the glut they [oil refiners] can't pass along the tremendous crude oil [price] increases they've had," Wake adds.
More aggressive competition for customers between retail heating oil dealers is adding pressure to keep prices down.
As a result, heating oil prices, which have not gone up nearly as much as last year largely because of brimming supplies, could be dampened even more, says the National Oil Jobbers Council, which represents about 8,000 retail oil dealers.
According to US Department of Energy (DOE) figures, the average refiner's price margin on a gallon of heating oil was 7 cents in September 1978. It jumped to 21 cents by September 1979, but in recent months has plummeted back to 15 cents.
The downward trend in profits also extends to retail dealers, DOE figures show. In August, retail dealers were tacking on an nationwide average margin of 15.1 cents; this month it is 11.2 cents.
Emil Gallina, an economist with the jobbers council, says that "barring any shock from outside the system, prices are going to be pretty predictable." He foresees prices rising no faster this winter than the overall inflation rate -- if that.