Before signing contract, consumers should know their tank capacity and what they use on average every year. This prevents buying too much oil. In addition, consumers should schedule a furnace cleaning in the fall, as dirty tanks may waste oil.
When reviewing a contract, consumers should understand the following terms:
- Fixed or cap price: A fixed price means that the consumer has a locked rate per gallon. A cap price means there is a maximum price the consumer can pay, but the price may drop if the market drops.
- Pay-As-You-Go plan: This contract type means that the consumer must call ahead of each delivery and pay the current market price.
- Contract Security: This ensures that the company secures the pre-buy funds.
- In Connecticut, dealers must legally back contracts with either future physical supply contracts for 80% of their commitments or a surety bond for 50% of consumer funds.
- Excess Credit Refunds: Consumers should confirm in writing that any paid, undelivered fuel credit will be reimbursed. This must occur within 30 days of contract expiration.
- Automatic Default Terms: Read the contract closely for any hidden exit fees or terms that void your fixed rate. For example, what happens if you miss a payment.