What Determines Home Heating Oil’s Price?

Dixon Energy lets customers stabilize their fuel costs — and save money, too!

As we approach the end of the year, your home expenses can really start to multiply. Snowfall and cold weather can start to reveal issues with houses that need to be repaired. The holidays bring plenty of costs. Then, there’s the price of heating oil.

At Dixon Energy, we work hard to get you the best possible fuel rate in northern New Jersey, but that won’t change the inescapable fact that homes use more heating oil during cold weather. That means you’ll need to buy more fuel. In this post, we’ll discuss what factors affect the price of heating oil and how we can help you spend less on heating fuel in the winter.

What is Heating Oil?

Heating oil is primarily a distillate of crude oil, closely resembling diesel fuel in its composition. It is denser than gasoline and combusts only when vaporized and heated to a very high temperature by your system’s burner. Additionally, some heating oil is blended with biodiesel, which is produced from organic feedstocks like restaurant grease, animal fats and plant oils.

What Affects the Price of Heating Oil?

The variables that contribute to the ups and downs of heating oil’s price include the following:

• Global Energy Markets: The price of heating oil often fluctuates because of the global crude oil market. It’s not just about New Jersey or even the U.S.; it’s a worldwide issue. Recently, prices have bounced around due to COVID disruptions, supply chain delays, wars and OPEC production cuts. Plus, Wall Street speculation can add to the uncertainty.
• Increased Regional Demand: Our part of the country uses about 90% of the country’s heating oil. So, when the Northeast faces a big blizzard or an extended cold snap, demand can skyrocket, and prices can jump.
• Production Costs: Things like transportation, storage, payroll, and distribution play a role in heating oil costs. But don’t worry; we work hard to keep these expenses low so we can pass the savings on to you.

Do Heating Oil Companies Want High Prices?

Heating oil retailers don’t make more money when heating oil prices are high. Just like your local grocery store doesn’t see more profit when the price of milk goes up, we actually tend to see profits drop when oil prices rise.

Our customers cut back on expenses and fall behind on payments, and we have to tap into additional lines of credit. Just like you, we hope fuel prices stay low.

How Can Dixon Energy Customers Avoid Sudden Price Spikes?

While we aren’t able to change what’s going on with international energy markets, we do have a way to make your heating oil budget easier to manage. It’s called E-Z Pay, and it doesn’t cost one penny extra.

Customers in Morris, Somerset, Union and southern Sussex Counties who take advantage of this plan no longer need to pay in full for their fuel when it’s delivered. Instead, we spread the cost of your heating oil over 11 months. You’ll always know how much you should budget for, and your winter bills will be cut virtually in half. Plus, we’ll give you a per-gallon discount for being an E-Z Pay customer!

Want to discuss enrolling in an E-Z Pay plan? Reach out to the Dixon Energy team today to get started.