What Factors Determine The Cost of Heating Oil?
Here’s why heating oil prices fluctuate
If you use heating oil to heat your Michigan home, you have probably found yourself in the following scenario before: you purchase heating oil at a certain price and then your next purchase costs something drastically different even if not much time has passed between the two purchases.
You have probably asked yourself why this happens and what accounts for the price change. So let’s take a look at exactly what factors determine the price of heating oil.
Why Heating Oil Costs Change
The basic concept of supply and demand directly applies to heating oil costs. When there is a higher demand for heating oil, it becomes more expensive, as is the case with most things.
However, the price of heating oil is impacted by a few other different elements. They include:
- Outdoor temperatures & the changing of the seasons: Heating oil becomes more in demand when temperatures drop even if those drops occur in an area where you do not live. When the demand for heating oil increases, the prices follow. It is very common for heating oil prices to increase in the winter and decrease in the summer. That is why we recommend ordering your heating oil in the summer before demand gets super high.
- Crude oil prices: Crude oil is what affects the price of heating oil the most since heating oil comes from crude oil. The price of crude oil is dependent upon supply and demand. So if the demand for crude oil is high, heating oil prices will increase.
- Transportation costs: If gasoline prices go up (which, as we all know, they do) and it costs more for companies to deliver heating oil to their customers, the price of heating oil will be directly impacted.
- Competition between suppliers: If you live in an area where there is a surplus of heating oil suppliers and, therefore, a lot of competition between these suppliers heating oil prices will be lower than they are in an area with less suppliers. Residents in an area with a low number of heating oil suppliers will pay more for heating oil.
Turn to Lansing Ice & Fuel For Heating Oil Deliveries
If you live in or around the Lansing, Michigan area and need a reliable heating oil supplier, know that you can count on Lansing Ice & Fuel. In fact, Lansing, Michigan residents and business owners have been counting on us since our doors opened in 1906. In addition to heating oil itself we also offer 24-hour service, competitive prices and a variety of payment options. Customers can also choose between our will-call/on-request service (this is when you let us know when you are ready for your next heating oil delivery) and our auto-fill service (with this option Lansing Ice & Fuel monitors your heating oil needs and schedules a delivery before your supply of heating oil gets too low).
Lansing Ice & Fuel’s services cover Ingham, Eaton, Shiawassee and Clinton Counties and we know and understand the needs of these communities since we are a local, family-owned business.
Contact Lansing Ice & Fuel today to start receiving reliable heating oil delivery and service.