Getting Answers: supply concerns as heating oil prices rise

Concerns about heating oil prices and supply heading into the cold weather months are affecting customers nationwide.
Updated: Oct. 26, 2022 at 4:55 PM EDT
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CHICOPEE, MA (WGGB/WSHM) - Concerns about heating oil prices and supply heading into the cold weather months are affecting customers nationwide.

“It’s going to be certainly a different winter…I think we’re all going to be experiencing some pain whether you heat with heating oil, natural gas, or electricity,” said Michael Ferrante, president of the Massachusetts Energy Marketers Association.

Ferrante spoke with Western Mass News about the concern over heating oil inventories.

“It’s really about what’s happened since the war in Ukraine broke out. The energy market has turned upside down, prices are very high with respect to heating oil, inventories are challenged right now,” Ferrante added.

That supply could be further challenged if temperatures plummet.

“I think there’s no question that if we have an unusual event like an extremely cold winter or severe storm that’s going to challenge inventories, but no one can predict that,” Ferrante explained.

Currently, the statewide average price of a gallon of oil is approaching six dollars. That’s close to double what you might have paid one year ago when it cost $3.30.

Ferrante explained wholesalers are now buying oil in smaller amounts on a day-to-day basis and there may be action required to ensure that wholesalers and retailers have supply available.

“There will be some, I don’t want to call it rationing, but allocation of product, so that we keep that steady flow to both the small retail dealer and large dealers as well,” Ferrante noted.

“Heating oil is not a problem. There’s heating oil around. However, the prices have been going up on a regular basis,” added Martin Topor of Central Oil in Chicopee.

Topor said those prices may mean some dealers only go to homes ordering upwards of 100 gallons and he shared customer loyalty may be the difference between a warm home and a long winter.

“A lot of people don’t think about heat until they’re cold…The shoppers may be in a state of shock when they start jumping around or try to jump around,” Topor explained.

As for other advice, Topor said, “keep your windows tight, insulate and set your thermostats to a reasonable temperature and we’ll get through it all. We’ve been through it before, we’ll do it again.”

President Biden has tapped into the strategic petroleum reserve in an attempt to keep prices down. Ferrante said there is also a reserve in the northeast, but it’s extremely rare to tap into and would only be used in an emergency.