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NEW YORK (CNN/Money) -
People who have gotten used to locking in prices in the summer for home-heating fuel will have to devise other saving strategies this year.
With fuel prices on the rise, dealers are saying no way to the fixed and capped-price programs that have grown increasingly popular in recent years.
They are "few and far between," according to John Maniscalco, an executive vice president with the New York Heating Association.
During the past few years, many heating oil users arranged for their winter's fuel shipments in late summer, when prices are cheapest, according to John Sullivan, president of the New England Fuel Institute.
Sullivan added, however, that when oil prices go down instead of up, customers have been reluctant to stand by their contracts, leaving dealers on the hook if customers bail.
This year, with petroleum prices so high, and threatening to climb further, many residential customers have expressed renewed interest in these deals, Sullivan said. Conversely, dealers, fearing a drop in wholesale prices, are more reluctant to offer them.
Maniscalco, however, does not take as a given the prices will keep going up. He said that there is an oversupply of heating oil. "In our harbor there's a lot of product available," he says. "We hardly know where to put it. If there's a mild winter this year, I think prices will crash."
Natural gas
Oil is used to heat only about 7 million American homes, mostly in the Northeast.
Prices for natural gas, used in 70 million homes, is expected to be up about 16 percent this winter, according to the Department of Energy.
The availability of locked-in prices for natural gas has always been more limited than in the heating oil market, according to Bill Trapman, natural gas expert for the Department of Energy. "Unless you live in a state that has retail choice, that can't happen," he says.
With deregulation spreading across the states, that is changing.
Many of the largest states, California, New York, Pennsylvania, Ohio, and New Jersey among them, have deregulated markets, enabling residents to shop for natural gas from marketers other than their local distributors. Consumers typically enter into contracts that last for a year, according to Trapman.
Unlike heating oil, where prices tend to be lowest during the summer and early fall, reflecting the reduced warm weather demand, natural gas prices are highest during those months.
That's because of the high fixed costs of delivering power, according to Trapman, maintaining infrastructure, paying employees, and the like. He says, "In winter, the fixed costs are averaged over many more units of fuel moving through the system."
Even in states without residential energy choice, consumers can at least establish a budget for their energy costs by opting for a uniform payment plan. In this option, customers pay the same amount for natural gas every month. "They can smooth out the payments over the year," said Trapman.
Toward the end of the contract, they go through a truing up phase, in which they will have to pay extra, if they used more energy than expected or if prices rose beyond forecasts, or they may receive a refund, if the winter was especially mild or prices had dropped.
Other ways to save
Trapman advises everyone that they may achieve significant fuel cost savings by taking these three steps:
1) Conserve energy: Check all appliances, especially space heaters, to make sure they're working at peak efficiency.
2) Arrange for a heat audit: Find out if that heating dollar is vanishing though window drafts and other openings.
3) Reduce the thermostat: Especially at night, turn the thermostat down as far as you can and still be comfortable. Wear an extra sweater around the house.
Volatile oil prices are roiling the stock market as well. For more, click here.
Some readers have found creative ways to cut their gasoline prices. Click here for that story.
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