Heating OIL at a twenty month low

Buying heating OIL is such a lottery. I wonder if there is any other product that is so volatile, apart, of course, from the raw material from which it is refined and we generally leave the purchase of barrels of crude OIL to those we assume to be “experts”!

That’s what makes buying heating OIL so tough for the person managing their lives, homes and budgets – they are not experts. At CBL we argue that you should not need to be an expert. Why should it be so difficult to know if you’ve got to the very best possible price for you on that day? Worse still, the volatility proves that this is clearly about timing, so did you even pick the right day to begin to find out if you had got to the very best price?

As it turned out Friday the 15th June 2012 was the best day to pick to buy heating OIL for nearly twenty months! Through 2011 the price of kerosene rarely flirted with the 50ppl (+vat) level, with most homeowners paying an average across the entire year of around 60ppl (+vat). On the question of timing everything changed yesterday, it was the right time to buy. But what about the other question…there’s another question…what other question? This is the other question: did you choose the best possible way in which to buy…did you buy with the group?

Community Buying Groups:  yesterday we chose to buy for one of our large buying groups – one that spreads across three counties and has many difficult issues to overcome – and this is how it turned out:

Notes from The Community OIL Buyers: in the whole of 2011 the price at which we bought heating OIL for our members barely fell below 50ppl +vat. Over the last two months the price of crude OIL has plummet from a high of $125 a barrel to a current price of $97 and as we have watched that, and the wholesale price of Kerosene, fall we have been waiting for the moment that we once again breached the 50ppl +vat mark. I had a feeling today that we would get close, but I was certain that the suppliers would do anything they could not to fall through that psychological barrier, so when our price harvest came back with the average still stuck at 55.5ppl +vat and the highest still over 60ppl +vat, it felt like 50ppl +vat would be a brilliant price today. Checking in on the internet sites (BoilerJuice showed a range from 53.82-56.7ppl +vat for today’s postcodes) I was further convinced that 50ppl +vat would be very very good. Then we got to work! It took several hours of negotiations to get to today’s remarkable member price:

  • Today’s stats:
  • Market high: 62ppl +vat
  • Market average: 55.5ppl +vat
  • Member price: 48.7ppl +vat

The Power of the Group:  that was the best possible way to buy heating OIL yesterday – and any day – by harnessing the power within the community and buying with a Community Buying Group. What did that mean for the members of this group? Certainly they are very happy members, because they saved a lot of money:

  • Had they bought on their own they would have been lucky to get a price within 4ppl of the Member Price, but would more likely have been closer to the Market Average of 55.5ppl +vat. Their saving against the Market Average is £68+vat for 1000 litres
  • Had they bought direct from the internet then their savings were at least £51.13+vat for 1000 litres.- NEVER BUY DIRECT FROM THE INTERNET!
  • Had they been one of those that thought that loyalty paid and picked the wrong supplier to allow to automatically fill their tank at any time the supplier chose, then their savings could be as much as £200+vat – that is exactly what occurred for the latest member that came to us from such a system: “you’ve just saved me £200 on one drop!”

Note: how happy do you think members feel about their own savvy decision to pay just £20+vat once a year to have their OIL bought for them any number of times?

Price and savings are very important, but it is always about far more than just money. The members belong to something. Their participation helps others local to them benefit simply because they chose to join. The group price tackles Fuel Poverty; the group order reduces carbon emissions; the group savings enhance the community in which that money remains; the group negotiations save a huge amount of time and hassle; the sense of group power begins to change thinking and habits leading to the potential to design myriad ways for a community to become happier, safer and more sustainable places to live.

Yesterday these members not only got their timing right, but they got the way in which they buy it right too, because even with prices falling the very best way to access the best possible price is to join the Community Buying Group and let the Power of the Group work its magic. It is the only way to turn the tables and become the “expert” you need to be in an extremely volatile market.