EagleTribune.com, North Andover, MA

New Hampshire

October 6, 2009

Fuel customers reject fixed-rate contracts

Even though The Old Farmer's Almanac is predicting a colder winter than last year, many fuel oil companies and their customers are warming up to the fact that this winter probably won't be as difficult for them.

The volatile oil market of a year ago is a thing of the past — a sign of relief, especially for Southern New Hampshire residents who signed fixed-rate fuel contracts when they thought the price of oil was going to continue to soar.

Expecting the price to increase well past $5 a gallon, many people last year rushed to accept the fixed-rate deals offered by their suppliers.

With the statewide average price hitting $4.73 a gallon in July 2008, what happened next had many oil customers reeling. The price of oil plummeted, falling an average of 20 cents a gallon in a few weeks and continuing to drop more than $2 a gallon in only four months, according to the state Office of Energy and Planning.

"I was kicking myself," said Dana Langley of Derry, who locked in at more than $4 a gallon. "Who knew it would drop in half in a few (months)?"

Langley, the owner of Derry Barber Shop on West Broadway, said last year's bad experience has made him think twice this year.

Langley is still trying to decide if he should go with a pre-buy deal this winter.

He's not alone.

Some local oil dealers said many of their customers are hesitant to choose fixed-rate contracts, although they saved hundreds of dollars during past winters. One bad year was all it took.

"This was a real wake-up call for some people," said Bill Ermer, owner and president of Ermer Oil Co. in Atkinson.

While fixed-rate contracts are usually a good deal, Ermer said, signing up for one last year was a real gamble.

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