Local oil companies weigh in

By PATRICIA A. RUSSELL, Valley Breeze Staff Writer

It may be summer, but anxious customers are already worrying about paying record-high heating oil prices when winter comes.

Finding ways to reduce those concerns through different payment plans is one way oil companies are giving people peace of mind.

Although there is no way to control outside forces that affect the price of oil, local oil businesses are offering flexible payment plans to make this winter's bills more manageable and palatable.

"We're trying to work with people," said Chris Brennan, operations manager of North Providence's Brennan Oil & Heating Company Inc., who said his telephone has been ringing off the hook. Customers are definitely concerned - "scared even," he said - about how they will afford to keep their homes warm, said Brennan.

"We're offering three different pricing ideas, he said, acknowledging that the cost of oil this winter is a "lot of money, no matter what you do." It will eat up a good chunk of the household money, said Brennan, whose grandfather, Joe Brennan, started the North Providence business 42 years ago. His dad, Dennis, is the current owner.

Brennan sent customers a letter at the end of last month that explains each plan.

One option is to pay the daily rate which compares to what motorists do when they fill their tank at the gas pump. As anyone who runs a car knows, the price of gas fluctuates almost daily. If you opt for this plan, your bill will reflect the price of oil on the day it's delivered.

A price protection plan or a pre-paid one is also available. Based on a customer's number of gallons of oil burned last year, you multiply that number by the price per gallon. Currently, this program, along with a discount, is about $4.39 per gallon, Brennan said.

The third pricing plan is based on an 11-month budget and the price is fixed. It's 10 cents more than the pre-pay plan or $4.49 per gallon, if you sign up now.

In Brennan's model, a customer with an average-sized house - about 2,500 square-feet - would use 800 gallons of oil in a year. Multiply 800 by $4.49 and divide that amount by 11. In this example, a customer would pay about $325 a month for 11 months, beginning in August.

Brennan Oil also offers cash on delivery orders. Consumers get a 10 cent discount off the daily price if they choose a COD delivery.

"Sometimes people make out better paying COD; but, there's a bigger impact on the pocketbook," said Brennan.

Brennan's advice is to pick a payment plan. He also suggested an oil burner tune up. Potential savings: 10 percent on heating costs.

Brennan said that, while it's been cheaper to heat with oil than gas for the last 20 years, "this year, the reverse is true."

According to Brennan, it is not economical for consumers to make the conversion from oil to gas because, in addition to purchasing a furnace, they will have to pay for the equipment to run a gas line into their homes.

Tim Morin of Cumberland, owner of Tim's Oil, who has been in business for nearly two decades, caters to customers in Cumberland and Lincoln.

"Customers," he said, know that, "when they call me, they get me," no matter the time of day.

He's run a "pay as you go" business.

Morin is considering payment plans to stay competitive. Right now, though, an oil delivery cost is based on "whatever the price oil is that day."

He suggested people buy now and start the winter with a full tank.

"It's going to be a very expensive winter," said Bill Reichert, vice president of the Glocester Town Council and owner of Reichert & Sons Fuel Oil in Glocester. He said people call every day about the price of oil.

At the moment, he's offering customers a pre-paid plan, with a gallon of oil costing $4.599. He hopes to offer that price for the pre-paid plan for another month or two in this "shaky" and "volatile" market.

A lot of his customers are on a budget plan and he accepts credit card payments.

While the price of oil has come down 40 cents a gallon in recent weeks, it's "still way too high," said David Salome, owner of Salome Oil Company Inc. in Woonsocket.

Also based in Woonsocket is Bousquet Oil and Consumer's Propane. Owner Ken Bousquet said he always offers customers different payment plans.

And he always offers them mid- to late-August.

Those include pre-pay, fixed-rate and capped-priced plans, as well as an 11-month budget.

A capped price sets the highest price you will pay. But if retail prices go down, you pay the lower prices.

Some customers have been "adamant" about getting on a plan now, said Bousquet.

He's standing his ground. Customers will have to wait a few more weeks before he rolls out his plans.

If he waits and the price of oil goes up in the next few weeks, people won't be happy with him, he said.

"But if they go down, I'll be a hero," he said.

Bousquet said that, with an 11-month budget, you can stretch out the payments so there won't be any surprises when Old Man Winter comes.

A budget plan is the best way to go, offered Richard Girasole, owner of Izzo's Oil Service in North Providence. "At least you know what you will be paying," said Girasole, who said more customers than usual have been calling about budget plans.

People shouldn't wait until their tanks are empty and call for a 100-gallon delivery that could possibly cost them somewhere between $450 and $500, he said.

Oil companies will be hard pressed to extend credit, said Girasole. That's because this year oil companies have to pay their suppliers 10 days after they get their oil.

That could spell trouble for folks on a fixed income who would not be able to pay their bills in a timely manner.

Even spreading out the payments, Girasole said he thinks "it's going to be a really bad" winter for some folks.

"There is going to be a lot of cold houses and a lot of cold people," he said.

Mike McKee, president of the family-owned McKee Bros. Oil Corporation in Cumberland, said the company would be offering a 10-month budget plan, a pre-paid plan and a capped-priced plan.

More people "are going on a budget plan," he said. It runs from August to May. "We're recommending the security of a protective plan," he said.