Heating Oil Q&AWhen Energy prices rise, we all feet it. Without a good understanding of what causes these ups and downs, it’s easy to think the worst.Q. How can companies in the same area charge very different prices? Heating oil is a very competitive business. At any time, you may find people who are priced either higher or lower than your dealer. The difference depends upon:Q. What can cause rapid price changes? The market responds immediately to any situation that might affect supply and demand, including unexpectedly cold or warm weather, supply interruptions or excess production. These changes are immediately reflected in the wholesale price your dealer pays for the oil he delivers to you.Q. Do local dealers make more profit during sudden price changes? No. When world oil prices rise, it doesn’t mean they get a bigger share of it. It’s similar to when orange juice prices go up because of an early frost. The local grocery doesn’t make the extra money.Q. So, who does make the money? Anyone (including major oil companies, refiners, speculators and others) who were either smart or lucky enough to have secured oil before prices started to rise. However, these same people would have lost money had prices dropped. |