Whether you are an average or an affluent consumer, it is the likelihood that you follow the trends in markets, such as with the continuously rising heating oil prices. As a consumer aware of the cost of living, it is only natural to be alert to the seemingly unstoppable increase of crude oil that is weighing heavy on the shoulders of Americans, and people all over the world who rely on oil to heat their homes. The truth is that all forms of energy are continuously rising, but none can compare to how the cost of crude oil has doubled in just two years.
That has lots of people scared, and with good reason, from business owners to the average homeowner or even renter. Everyone who lives in the northern parts of the country, especially, needs heat to survive. So, what is anyone to do?
Try Reducing Consumption
A reduction in consumption is a healthy move for your wallet, and it won’t even affect your comfort level as it will be virtually unnoticed. For instance, during the waking hours at home, turn down the thermostat a couple of degrees and simply wear a sweater, leaving short-sleeved shirts and shorts for summertime. When away at work or during sleeping hours, turn down the thermostat some more. You’ll still be comfy and cozy under your comforter, and you’ll be saving a bundle.
What Are Consumers Doing to Combat the High Costs?
Most are cutting back on consumption, using tips that help them stay warm but save them money at the same time. It’s unfortunate that some people are actually in a position that they have to choose between heating and necessities, like food or medication, but it is happening. Others are being smart consumers, shopping around for the best deal, and of course, waiting on a “good day” to fill up, like when crude oil is trading for less on the markets. In order for this to work, however, you’ll have to be well aware of the current prices, the trends, and of course, still have enough oil in your tank to make it through to fill up day. Another strategy is to find an economical oil budget plan from your home heating oil supplier.
Other things that can be done include: signing a price cap contract, which protects you from rising heating oil prices; choosing a company that offers valuable promotions, like discounts for paying upfront for the oil rather than choosing the financing option; or those that give seniors a discount. The truth is that consumers need to be smart if they are to survive the bitter costs and cold. Some homeowners are just converting to other energy sources or adding second sources of heat, like wood-burning stoves, for example.
Who is Really Affected?
Any consumer that uses oil for heating is directly affected by the rising costs, and 80% of those consumers happen to be in the Northeast, including about a million homes in Pennsylvania. Those that heat with natural gas should only expect an increase that is equal to about 15% more.
In addition to the above, federal heating assistance was slashed by about 25%. This program would help those in lower-income households to pay for their heating, but with so many cuts, many are literally left out in the cold.
Even small companies that deliver home heating oil are greatly affected as many consumers opt for less oil at each delivery. That keeps companies’ costs high, but their profits shrinking. And, price fluctuations within a day or a few hours can have a huge impact on these smaller companies that often take a big loss, even if it the fluctuation is a mere few cents on a gallon.
For a long time now, it seems as though any excuse will cause a price hike in crude oil, from cold weather to a hurricane. It’s hard for people to pay $5 a gallon to heat their homes and consumers just aren’t getting anymore breaks. Why? Some analysts believe it has a lot to do with relationships in the Middle East, and how Iran threatens to close the entrance to the Persian Gulf, but others believe it is mostly related to the growing demand for oil and diesel in growing economies.
There is also the issue with the new low-sulfur regulations on oil and diesel that are responsible for the increases, in addition to the low inventories in the United States. Many refineries have closed, further lowering inventories in the area. Another problem is the actual weather, and if it is not cooperating, it could easily cause a spike in prices.
Will Heating Oil Prices Ever Come Down Again
Certainly heating oil will fluctuate in pricing from one month to another, or one season to another, but it is unlikely that Americans will ever enjoy low cost oil again. Given the fact that growing economies are demanding more of this resource means that we are in direct competition for it, so it will keep prices relatively high.
Having said that, it may seem like heating will cost much more this year mostly because last year’s winter was quite mild, whereas this year it is more typical. So, it’s not just costs that will be higher, but also actual consumption that should be factored into the equation. The recent hurricane, Sandy, which constricted supplies, especially to the Northeast, where people needed it the most is yet another culprit.
How Does the Future Look?
For some, it seems quite bleak, but others see that all forms of energy are rising, and will at some point even out. The point is that we are exhausting our traditional resources, so we must all do what is necessary to reduce our consumption, which will benefit us in many ways, aside from just financially. For one thing, future generations will enjoy a cleaner environment, and a safer one. The best advice that could be given to a consumer who must heat his/her home is to do so after carefully considering all the factors, and using every possible money-saving technique or tip available.