Propane and Heating Oil Variable (Market) Rates: Reasons For and Against

When you decide to pay a variable price for heating oil and propane, which you pay is the market price on the day of delivery. Market prices fluctuate up and down every day. What are the reasons for and against choosing to pay the price variable instead of choosing the fixed or inconvenient for propane or heating oil this year? Let's look at two aspects:

Reasons to Register variables (market) prices this year:

It is a fact of life that sometimes the price of heating oil and propane goes up and sometimes down. variable pricing could be the right choice if you prefer not to pay additional charges associated with fixed prices and downside protection, and will not sign a legal contract - which is what you have to do when you sign up for heating fuel propane or option price protection. And, current prices are almost as high as they were in 2008. In 2008 some people locked in their heating oil at more than $ 4.00 per gallon. If you paid a variable price for heating oil, then market prices of heating oil dropped the price you paid was also down.

Reasons Not to Register for variables (market) prices this year:

If you need to be able to estimate the heating bills in winter so you can manage your budget, then the variable price can not be the right choice. fixed price allows you to set a price. You can calculate the gallons to be used based on their past consumption. Know your estimated gallons locked in the price you can easily budget for the winter. variable price not let you do that. If you were at varying prices, so you never know what your next delivery would cost.

You understand that, with fixed prices, prices could go below the price that the lock-in cases, as they did in 2008, but for fixing the price will not try to guess where prices are going (no one can do ), it is peace of mind.

Your final decision on whether or not you choose variable price shall be reduced to what is most important to you. If you are concerned that heating oil prices will be reduced after lock-in and do not want to pay additional fees to lock in or get downside protection, then it is very likely going to consider a variable price option. If you prefer to predict the cost of heating oil for next winter, so you can finance your household budget, then it is very likely going to consider fixing the price of heating oil per gallon.