Heating Oil Regret: Locked In at a High

Oct. 16, 2008— -- This summer, like so many past years, Bob Forguites decided to buy his home heating oil early and lock in his price for the winter. Oil was selling for about $4.50 a gallon back then, and it looked as if it wasn't about to fall. Forguites locked in at $4.10 a gallon.

"It was a good price at that time," Forguites recalled.

But now with the global economy near or in a recession, oil prices have plummeted to about $3 a gallon in his area of southern Vermont. He is stuck paying $4.10 through the winter.

"In the years past, we've turned out well because of this agreement," he said. "This year is just different."

Forguites isn't just some homeowner. As the town manger of Springfield, Vt., he locked in the price for 250,000 gallons of heating oil for the town and its school district.

That's more than $1 million for fuel that would be about $250,000 cheaper if he had waited.

Forguites has locked in the price for the town's heating oil for the last several years and said the move has saved the town money every year until now.

"Traditionally, the prices tend to go up once the heating season starts. We've done that for a number of years," he said. "We're trying to get some changes, but I don't know if we'll be successful."

"We didn't know what was going to happen to the world economy."

One state over in New Hampshire, Bob Garside has seen homeowners in similar situations, who locked in rates this summer -- prepaying for a winter's worth of oil -- and now are mad because prices are so much lower.

Garside, president of the Oil Heat Council of New Hampshire, which represents about 150 oil suppliers, or 80 percent of the state's heating oil supply, said that once a contract is signed, there is no changing it.

"The people who bought high are unfortunately stuck with that price this winter," he said.