Heating oil gamble: Fill up now or sweat it out until fall

Some people are trying to get ahead of the curve and are filling their home heating oil tanks now, before the high price for heating oil gets out of reach.

Others are going to sweat it out through the summer and hope the prices fall.

“Who knows?” asked Ken Santarelli, of Santarelli & Sons Oil Co. in Peckville. “I can’t tell you what it’s going to be in an hour, yet alone a week, a month or a year.”

Gary Stull, vice president of Phillips Fuel Inc. in Plymouth, said prices have jumped erratically this summer – at one point last week there was an 18-cent increase in a 24-hour span. In the past month, the price for a gallon of home heating oil from Phillips jumped 45 cents to last week’s $4.42. With an average tank holding about 275 gallons of oil, that means those who filled up now instead of one month ago paid an additional $123.75.

But most homeowners are holding out, said Russ Newell Jr., president of supply and distribution at Newell Fuel Service in Trucksville. He said the prevailing wisdom in the business and in life is that whatever goes up will eventually come down. Customers are banking on that theory, he said, and holding out until it either happens or they wake up one late fall morning with a cold house and an empty tank.

Santarelli compared customers playing the game to those at a table game in an Atlantic City casino.

“You’re playing craps,” he said. “I personally feel it has to come down. Eventually the bubble has got to burst. The question is when. And nobody knows the answer to that.”

Some Newell customers purchasing oil recently paid $4.20 a gallon. A month ago they would have paid $4 a gallon; a year ago they would have paid $2.25. “There’s no more penny or half-cent fluctuations anymore,” Newell said.

While Stull said he refrains from offering advice to customers asking whether to fuel up now or take a wait-and-see approach, Newell said he has told customers to wait.

“It depends on your financial situation. If you don’t really need it, I think I’d hold off and wait until October,” Newell said, throwing in a note of caution. “It may come down in the fall, but if it stays like this (prices escalating almost daily), it’s going to be a disaster.”

But with the economy struggling and families feeling the spiral effect of the rising fuel prices – higher food costs, pain at the gas pumps, price increases in goods containing petroleum – Santarelli and others said they’ve received a higher-than-usual amount of requests for partial tank fill-ups.

Newell said people are trying to work in some oil while they have some spare money, but he’s been dispatched to the same house multiple times this summer to fill up the tank as much as people can afford that month.

Allen Kropiewnicki, owner of Eastern Fuel Oil in Newport Township, said the majority of his business this summer has been partial fill-ups.

“Nobody’s filling up,” he said, adding that he sees that trend continuing indefinitely.

He said people “just don’t have the money to fill up.” At his rate of $4.40 per gallon, a fill-up would run $1,210.

“People are getting a few hundred dollars worth, mostly because that’s all they can afford,” Kropiewnicki said.

While the prices are skyrocketing, Newell said people have to realize the oil delivery companies are not seeing increased profits and struggle themselves to keep up with the increases.

Virgil Argento, owner of Wayne Fuel Oil Co. in Wilkes-Barre, said this summer is the worst he can remember during his nearly 20 years in the business. He said last week he had six deliveries. A normal mid-July week, Argento said, usually means 15 to 20 oil deliveries.