Heating oil prices paid by consumers are determined by the cost of crude oil, the cost to produce the product, the cost to market and distribute the product, as well as the profits (sometimes losses) of refiners, wholesalers and dealers.  Heating oil prices paid by consumers can vary over time and by where a consumer lives.  Prices can change for a variety of reasons.  These include:

Seasonality in the demand for heating oil - When crude oil prices are stable, home heating oil prices tend to gradually rise in the winter months when demand is highest.However, at times, prices can surge quickly to very high levels, as occurred in January/February 2000.  A homeowner in the Northeast might use 650-1100 gallons of heatingoil during a typical winter, while consuming very little during the rest of the year.

Changes in the cost of crude oil - Since crude oil is a major price component of heating oil, changes in the price of crude oil will generally affect the price of heating oil.  Crude oil prices are determined by worldwide supply and demand.  Demand can vary worldwide with the economy and with weather.  Supply can be influenced by the Organization of Petroleum Exporting Countries (OPEC) and other factors.

Competition in local markets - Competitive differences can be substantial between a locality with only one or a few suppliers or dealers versus an area with a large number of competitors.  Consumers in remote or rural locations may face higher heating oil prices because there are fewer competitors.

Regional operating costs - Heating oil prices also are impacted by higher costs of transporting the product to remote locations.  In addition, the cost of doing business by dealers can vary substantially depending on the area of the country in which the dealer is located.  Costs of doing business include wages and salaries, benefits, equipment, lease/rent, insurance, overhead, and state and local fees.
Lower you heating oil prices

Talk to Pilgrim Oil about participating in their oil buying group to lower your heating oil prices.  You can obtain a home energy audit with Pilgrim Oil to ensure that yourfurnace and appliances are running efficiently before the season begins.  You can achieve conservation gains by weatherizing your home, i.e., installing the proper insulation in your house and around your hot water heater.  Quick and easy fixes such as caulking and weather stripping windows and doors to seal out cold air also help save energy. Installing a programmable thermostat and reducing temperature settings on your thermostat, especially when you are not a home, are other ways to reduce your heating fuel costs.

Lower your heating oil prices an average of $275 - $500 per year by purchasing home heating oil as members of a group.  Find the cheapest heating oil prices.

Learn how, read more