Heating Oil Contracts Guide

Many oil heat dealers offer contracts to their customers. For consumers,
contracts may offer some price protection or the ability to spread payments
over the year. For dealers, contracts help them better predict customer
demand and may give them more buying clout for their customers

Table of Contents

Questions to Ask about Dealers

What kind of experience, capability and equipment does the dealer have? This will give you some idea of the skill level of the dealer. How many trucks does the dealer have? Are they in good condition? Both are related to how the company will be able to service your account.

Has the dealer already purchased the gallons they are committing to under the contract? How will they guarantee that the oil will be available? Some contracts will include language that says, "while supplies last." The contract should tell you what happens if the dealer is unable to provide you with oil because of oil supply shortage

Has the dealer offered contracts in the past? Make sure your dealer has experience offering contracts. You may also ask how their prices were last winter. Did they honor their fixed price contracts or have to increase the rate?

Will the dealer give you references from other customers? It is in the best interest of dealers to give you names and numbers of satisfied customers that are willing to speak with you. You can also speak with friends and neighbors who have experience with different companies. Local business groups may also be able to refer you to reputable dealers in your area.

Does the dealer have a customer service department? Do they offer round-the-clock service? Ask the dealer if they have a customer service number and the hours of operation. Ask what happens if you have an emergency during off-hours.

Is the dealer licensed? Oil heat dealers are not required to be licensed in Massachusetts.

Key Actions   for Questions to Ask about Dealers

Questions to Ask about Contracts

What price plans are available to consumers? Some oil dealers offer customers fixed price or variable price programs.

  • A fixed price program establishes a fixed price per gallon for a predetermined number of gallons. You should ask how long the fixed price would be in place. You may also ask if it is guaranteed.
  • In variable price programs, the price may change in relation to how much oil the customer uses. They may also vary according to when you sign your contract and whether you pay some or all of your costs up front.

What is a cap price program? A cap price program is a variable price program that offers a guaranteed ceiling price per gallon of oil for a defined period of time (i.e. Oct- Apr)

Are there any fees for setting up a cap price program? Cap price contracts are generally more complicated to manage than fixed-price contracts. Consequently, there is sometimes a set-up fee associated with cap price programs. Fees vary widely depending on dealers so make sure you check with several dealers before signing.

What happens if the price of oil drops below the cap price? In some contracts, you pay the lower price. In others, you will continue to pay the cap price.

Will I need to sign a written contract? How long does the contract last? Informed customers make better decisions. Ensure you understand all the terms and conditions of the contract. Read the small print carefully. Are there any penalties for ending a contract early? Some contracts stipulate that if you end your contract early you will be charged a termination fee.

What are your rights if the dealer ends your contract? Call the Consumer division of the Massachusetts Attorney General at 617-727-8400

Does the contract include customer services, maintenance, service calls, inspections, furnace parts or repair? Are there additional fees? You may contract for either oil delivery only, or for oil delivery and a service contract (full-service). If you choose oil delivery only, you will need to arrange for customer service.

Full-service dealers generally offer automatic delivery and operate service departments, offering technicians and parts. Some offer installation. The terms of service contracts vary. Usually, full-service contracts entitle you to an annual maintenance visit, emergency service, and free replacement of certain parts. Installation services and 24-hour rapid response to "no-heat" calls may also be included. Some dealers may offer coverage for tank replacement and other related services.


Payment Questions

Is there a pre-payment or deposit? How and when will I be billed? Some dealers may require full payment up front in order to guarantee a fixed price. Others may accept partial payment. Still others will allow you to pay-as-you-go, typically on a monthly basis.

Do they offer budget plans? You may be able to spread payments over the heating season. The amount paid each month is based on the estimated amount of heating oil the consumer is expected to use throughout the heating season.

Are there any discounts or bonuses available? Some companies offer discounts based on early payment. Some dealers provide discounts to the elderly.

Key Actions   for Payment Questions

Other Shopping Options

Oil cooperatives (co-op) can save members money on their oil and other services. They may also offer discounts to low-income customers. Many co-ops offer discount membership fees for senior citizens.

Below are some coops operating in Massachusetts:

Cape & Islands Self-Reliance Corporation (heating oil on the Cape and the Islands)

Citizen's Oil Co-op (propane and heating oil in Southern Massachusetts towns bordering CT)

Co-op Power (heating oil in Western Mass: Franklin, Hampshire, and Hampden counties)

The Fuel Club (heating oil and propane out of NH check for availability in MA)

Green Energy Consumer Alliance (formerly Mass Energy-serving most of Massachusetts)

Please note that these links are provided as a courtesy for consumers and are not an endorsement of any of these organizations by DOER or the Commonwealth of Massachusetts.  


Additional Resources   for Other Shopping Options

Help with Your Energy/Utility Bills

If you or someone you know is having issues with your energy or utility bills, here is some information on help with paying bills, shut-off protections, consumer rights and more.  

  • Home Energy Assistance Programs: state run income eligible programs including fuel assistance (LIHEAP) and weatherization (energy efficiency).  Find your local agency at Heating Help Massachusetts.
  • Merrimack Valley Clean Energy & Energy Efficiency Programs: As part of the settlement for the Columbia Gas Merrimack Valley Natural gas explosions, a $56 million fund has been created.  These funds provide debt relief for gas bills to thousands of low-income gas customers and enable clean energy and energy efficiency efforts in homes and buildings in Lawrence, Andover, and North Andover
  • Mass. Dept of Public Utilities (DPU); Help Paying Your Utility Bills: provides information on Shut-Off Protections, Discount Rates and more.  Be sure to ask your utility about the Arrearage Payment programs if you are behind on your bill.  Municipal utility customers should contact their utility directly for their programs.  
  • Keeping Your Utilities On:  Massachusetts Attorney General's website providing consumer information on your rights and how to file complaints related to energy bills.
  • Salvation Army Good Neighbor Fund: assists income eligible consumers with utility bills.  Information on 2020-2021 Guidelines and applications is available.  Check their website for when Program will open.
  • Energy Efficiency Programs:  Mass Save runs the states energy efficiency programs-check for rebates and incentives.  Municipal utility customers should also check Muni-Helps for their utility programs.  

Additional Resources   for Help with Your Energy/Utility Bills

Related Links and Resources

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