Get the Best Price for Heating Oil this Winter

Heating costs are a drag on everyone’s budget during late fall and winter. When you work in an office building you can reap some savings by setting the thermostat back for the hours you’re out of the house. But when you work from home, you need the heat at a comfortable range all day long – and that gets expensive! Use these tips to keep the high cost of home heating oil from cutting into your profits this winter.

Which sends a bigger shiver down your spine when you think about winter: the idea of snow and cold blistery breezes, or anxiety over what your heating oil bill will be?
If you’re like many Americans today, particularly in the Northeast, the cost of heating oil can make a big impact on your budget. If you work from home in your own business or for an employer that impact can be significant, since you are at home day and night. 

For some, higher oil prices equate to less discretionary income. For others, an increase in oil prices or an a colder-than-usual winter can be devastating. 

As of the first week in November, 2022, the average cost of a gallon of heating oil was $6.07 on Long Island, New York. That’s a whopping 95% increase over the August, 2021, when oil cost $3.11 per gallon. At $6.07 per gallon, if you have a 2,000 square foot home and use 900 gallons of oil during the heating season, you’ll spend nearly $5,463 on home heating oil.

Heating oil costs can vary significantly up or down from month-to-month and year-to-year, making it difficult to predict just how much your winter heating oil bill will be. The only certainty: the cost of heating your home (and home office) with oil will be significant.

Although you cannot control certain outside forces that affect the price of oil — like the cost of crude oil or geopolitical unrest in oil-producing countries — there are things you may be able to do to pay a lower price for heating oil. Here are options to consider.

Select The Best Payment Plan

Locked-In: Fixed or Capped

With locked-in pricing, a particular price per gallon is either fixed or capped for one year. A fixed rate doesn’t go up or down. A price cap or ceiling plan sets the highest price you will pay, but if market prices go down, you pay the lower prices.  Locked-in pricing can be a win-win for both provider and customer. The oil dealer has the customer’s guaranteed business for a year, and the customer often benefits by lower-than-market pricing. Be aware that penalty fees of about $200 to $600 will most likely be charged if you cancel your contract before the year is up.

Market Price

When you pay the market price for heating oil, typically no yearly contract is involved. You are simply charged the current market rate the day of your oil delivery. Your pricing goes up and down with the market for better or worse.


When you pre-buy your heating oil, you pay preseason for your total estimated oil usage for the entire winter. The price you pay is usually competitive with the current market pricing on the day you sign your contract. If winter heating oil prices rise, you’ll come out ahead. If they go down, you’ve made a gamble and lost. If you’ve paid for too little oil, you’ll have to pay market prices for the rest of the winter season. Pre-Buy plans can be great for those who can safely afford to pay for their heating oil ahead of time and the price of oil rises over the winter season. A worst-case scenario to be considered is the loss of upfront payments should your oil company go out of business or file for bankruptcy.

Budget Plan

With a budget plan, your heating oil company will calculate your yearly heating oil cost based on past usage and then bill you a flat monthly fee over a period of 10 to 12 months, making it easier for you to budget for the expense. At the end of the year, your actual usage is compared to your predicted usage. If you used less oil than predicted, you would get a credit towards the next year. If you used more than predicted, you get a bill for the difference.

A Little Homework Can Help with Payment Plan Decision

Go online and search for “home heating oil prices” followed by the year. (Example, home heating oil prices 2022.)  Look for a search result that ends in gov, or that looks like it’s from some authoritative source that isn’t an oil company. Or, call your local consumer affairs office. You should be able to find information on home heating oil prices (in cents per gallon) by month for the current and previous year. Look at how the prices have changed (ie, up or down).

Also visit the US Energy Information Administration (EIA) website and look at their “Short-Term Energy Outlook” page. It includes information on projected heating costs for the coming winter season as well as projected winter fuel costs by specific fuel and region. A summary of winter weather forecasts for the US is also provided.

Full-Service Versus C.O.D. And “Hybrid” Oil Companies

Full-service oil companies offer automatic delivery, service contracts, budget plans, 24-hour emergency service, and – less often today – locked-in payment plans. A service contracts provides for an annual system maintenance visit and for most repair parts and costs. This annual cleaning and tune-up help optimize performance and longevity of oil heating systems and can lower an annual heating bill up to 10 percent.

Some full-service providers also offer one or more discounts and/or special offers such as those for customer referrals, prompt payment, seniors and large deliveries. Customers are expected to make regular payments within 30 days.

C.O.D. discount dealers offer heavily discounted prices, but payments must be made in cash or credit card on the day of delivery. The bottom line is that you are paying for the heating oil and nothing else; i.e., no service contract, no yearly maintenance, no budget plans, and no fixed rates. If your furnace breaks downs, you’ll be paying those repair costs in full. You’ll also need to keep track of your oil tank levels; discount dealers typically do not offer automatic delivery.

There are also a number of “hybrid” dealers. These companies combine features of both full-service and C.O.D. companies. Fuel oil prices are discounted – but generally not as much as C.O.D. dealers – and service contracts are offered. Payment in cash or credit is due on delivery, or within five to 10 days.

Full-service dealers generally charge the highest overall prices, but many offer free or discounted one-year contracts. This arrangement can save money in the long term; i.e., the included annual maintenance and tuning of heating systems save energy and money, and most furnace repair and parts are provided free of cost to the contracted customer. C.O.D. companies offer the lowest prices per gallon, and hybrid companies are generally somewhere in between.

Related: Slash your heating bills this winter with these fuel-saving tips.

Choose Your Local Oil Provider

Read these words and commit them to memory: Each and every year you – the homeowner – need to spend an hour or two calling at least a half dozen local oil companies; a dozen would be best. By shopping around for the best price and service, it should easily save you hundreds of dollars on your heating bills this winter. If you have a current contract, time your calls for a few weeks before it expires.

Questions should include:

  • How long have you been in business?
  • What is your price per gallon for the market rate; and if offered, what is your price per gallon for your fixed and capped rate? Do you offer any special discounts?
  • Is the service contract included in the price, and if not, how much is it? What does it include?
  • How long is the contract term, and when does it start and end? (Some companies end all contracts on a particular date; i.e., every June 1, no matter when you sign on.)
  • What is the company policy if you choose to go with another home heating oil provider before your contract term has ended? What, if any, penalties will you pay?

The first red flag is often established upon your first phone call to a potential oil dealer. Did someone actually answer the phone, or did you get a busy signal or a voice message? Was the company rep pleasant or surly? Were you told that someone would get back to you, but no one did? If your burner breaks down in February, you’ll want to know you’ll be able to get through to your oil company immediately in order to get needed repairs.

Geography, peace of mind, and the age and condition of your furnace should also play an integral part in your decision making. For example, someone with a 15-year-old furnace living in the Northeast might want the security of a full-service oil company with 24-hour emergency service and a contract that will protect against unexpected repair costs. In contrast, an individual living in the South with a brand new burner might be better served by paying for discounted fuel C.O.D. and simply paying to have a yearly tune-up.

When you do choose a heating oil provider, make sure that the company and its technicians are fully certified, licensed and insured. You’ll also want an established reputable company. Check with your local consumer affairs office and Better Business Bureau ( for information about the number and resolution of past customer complaints.

Oil Buying Groups

Consider joining an oil buying group in your area. These oil buying cooperatives use the collective buying power of members to negotiate considerable discounts on heating oil, service and heating equipment. Participating oil dealers benefit by receiving a high volume of guaranteed, repeat business and then in turn are able to significantly reduce their profit margins from those charged to the general public.

To find a group in your area search Google or Bing for the term Oil Buying Groups. Compare their pricing and reviews, if available, to the pricing from your regular oil company.

Heating Assistance Programs

There are local, state and federal government heating assistance programs available for homeowners who meet certain criteria; i.e., low income, the elderly or disabled. To find out if you’re eligible, choose the “Benefits Finder,” on the U. S. government site, This is a great site that acts as a single source for locating assistance programs at all levels of government. You can get results by completing the Benefits Finder questionnaire, or by browsing by state, federal agency or category (energy assistance).

Heating assistance programs in all 50 states include the U. S. Department of Health and Human Services Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program. LIHEAP provides assistance in paying energy bills, while the Weatherization program provides for the installation of energy efficient improvements that reduce energy costs. Each state has slightly different criteria.

Remember… with a few hours of your time, you the homeowner and consumer can have the satisfaction of knowing you’re paying the best possible price for your heating oil.

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