Market Price Vs. Pre-buy: Which Is better?

When it comes to choosing the best way to pay for your fuel deliveries, it pays to be informed about your options so you can choose the plan that’s right for you.

At Pemi River Fuels, we offer two basic ways to pay for your heating oil or propane: a Will Call option (with fuel purchased at the current market price) and a Pre-buy option (which is a type of fixed price).

Market Price option

The market price for heating oil and propane changes from day to day, with no price ceiling or floor. If you choose to pay market price, you’ll benefit from falling prices, but you’ll also pay more for your fuel if the price rises. The market price, of course, is unpredictable and based on a number of factors, including the cost of crude oil and the weather – both of which can vary widely.

Pre-buy option

With a Pre-buy option, all gallons for the upcoming heating season are purchased in advance at an agreed upon price. The price of your fuel doesn’t change – you’ll pay the same price for your heating oil or propane throughout the heating season, no matter what happens in the market. With a Pre-buy, you’ll benefit if heating oil or propane prices rise (which they usually do, unless we have an extremely mild winter), but can’t take advantage if fuel market prices drop.

Each of these options has its advantages and disadvantages – and much of the decision about which plan is right for you depends on your tolerance for risk. If you like certainty, a Pre-buy price might be best; if you have a little gambler in you, market price might be a better option.

If you’re already on a pricing plan, we recommend sticking with it rather than trying to jump from one program to the next trying to time the market.

Need help in choosing a heating oil pricing plan that’s the right fit for your family? Contact Pemi River Fuels today – we’re happy to talk about it! And remember: for reliable propane delivery and heating oil delivery in Central New Hampshire, nobody beats Pemi River!