info@vermontfuel.com
and Training
Propane Certified Employee
Training Program (CETP)
CONTINUING EDUCATION SEMINAR
F.W. Webb
Williston, Vermont December 5, 2008 8 Hours of Vermont Approved Continuing Education for State of Vermont Propane CETP and Natural Gas Renewal
HAZMAT CERTIFICATION COURSE SPRINGFIELD, VERMONT DECEMBER 10
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about the safety, security and efficiency of Oilheat.
visit our website at http://www.vermontfuel.com
Like the rest of New England, Vermont is seeing home heating oil prices come down significantly this fall. The Vermont Department of Public Service says the average hit a high of $4.65 per gallon in July, and had declined to $4.13 in early September. This month it's been dropping further, with the average going from $3.78 on Oct. 6 to $3.58 on Oct. 13 to $3.39 on Oct. 20. —Associated Press 10.24.08
Heating-Oil Distributors
Fear Tough Winter
Wall Street Journal 10.23.08
NEW YORK — The tight credit market is forcing weak links in the heating oil supply chain, from wholesale suppliers to homeowners, into the cold. Borrowed cash infuses nearly every step of the supply networks that bring heating oil from refiners to individual homeowners and businesses. For wholesale suppliers and door-to-door distributors, loans cover the weeks or months between when fuel is purchased and when it is sold to the next step on the chain.
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802-223-7750
info@vermontfuel.com
LIHEAP CHANGES
Vermont’s Fuel Assistance Program has changed. Any dealer that signed a contract this summer agreeing to be a supplier of heating oil, ULSD, kerosene or propane to Vermont heating assistance customers will be asked to sign an addendum to that contract. The addendum will require the dealer to discount ALL gallons sold to heating assistance customers by 3% or by the current cash discount price—WHICHEVER IS GREATER.
Whoever signs the addendum will have funds transferred to their account on November 17. The program recipients will be notified on November 19th. However, no payments will be transferred if the dealer does not sign and return the contract addendum by October 31st. The addendum states that the dealer will agree to the new discount. VFDA has compiled a list of frequently asked questions about the new rules. You can find it on our website at vermontfuel.com or give us a call and we will fax you a copy.
How Did This Happen?
One year ago, state officials began re-examining how heating assistance is delivered in Vermont. Controversial leveraging proposals such as Margin-Over Rack and Discount-Off-Retail were discussed. VFDA members met with a Leveraging Task Force in November of 2007. Mark Wolfe, a Washington, D.C. based contractor, was hired by the state to study how to implement a leveraging program. The Wolfe Report proposed that heating oil dealers sell to LIHEAP customers at a significant discount. However, that did not occur. In April, after hearing testimony from nearly a dozen VFDA members, the state agreed to drop the proposal for the current heating season. Now the program is back, six months after it was shelved. The state has $38 million in federal LIHEAP funds, triple last year's federal allotment. However, unlike previous years, the state of Vermont is not contributing any money to the program. Meanwhile, there is a case load increase. The Vermont Joint Fiscal office believes they can service 3000 more households with the forced dealer discount.
PRE BUY & FIXED PRICE CONTRACTS
With the price of oil coming down, there has been a lot of discussion around the notion of renegotiating fixed-price, pre-buy heating oil contracts. Here are the facts:
When a customer enters into a fixed-price contract, home heating fuel retailers are required by Vermont Act 210 to secure the oil from their supplier. They must do so in order to have the fuel on hand to fulfill their end of the contract.
Retailers don’t get a lower price from suppliers on their fixed-price buys. As a result, most retailers are stuck with having purchased higher priced wholesale supply contracts months ago in order to meet their obligations to the fixed-price customers.
Last year, the price of heating oil rose dramatically. Retailers were able to provide fuel to their fixed-price customers at the lower price only because they had secured the fuel at that price with their suppliers when the fixed-price contract was executed with the customer.
Consumers who lock in their price are doing just that – locking in a price. A fixed-price contract is not a guarantee that fuel will be provided at the lowest price, it is a guarantee that fuel will be provided at a fixed price.
The bottom line is, a contract is a contract, and retailers entered into contracts with their suppliers based on contracts signed by fixed-price customers. Retailers cannot be held responsible for market volatility brought on by speculators fleeing the market, any more than they could be held responsible for the price increases we saw earlier this year when speculators were driving the prices to historic highs.
THE RISE AND FALL OF CRUDE
Crude oil now trading in the $60 range
One
year ago speculators fled from their investments in sub-prime
mortgages. The money flowed to commodities. This raised the price of
gold, wheat, oil, etc. The impact of this injection of cash was most
pronounced in energy futures. Thanks to the Commodities Futures
Modernization Act, energy is permitted to be traded electronically
beyond the reach of the Commodities Futures Trading Commission (CFTC).
Vast amounts of money can be traded in these “dark markets” with little
to no oversight. Investment banks, hedge funds, sovereign wealth funds
and pension funds plowed cash into futures contracts, subsequently
driving up the price of crude oil to $147.27 on July 11th. This clearly
was not a lack of supply, but a demand of futures contracts based on
predictions of $200 crude.
Then it happened—the
price of crude began to plummet when it seemed least likely—in August
as hurricanes battered the Gulf Coast and the refineries and shipping
lanes were shut down. The decline in prices despite short term supply
and demand issues was the first indication that the speculative bubble
was about to burst. This preceded the financial hurricane on Wall
Street. Over the next month, hedge funds and investment banks got rid
of their long positions. The commodity market collapsed and the equity
market followed. The Dow Jones fell below 10,000 and Congress passed a
$700 billion bailout package.
Patch Chit "Split the Ticket" UPDATE
Heating fuel companies continue a proud
tradition of giving back to the communities where they work and live.
The Vermont Fuel Dealers Association's Patch Chit "Split the Ticket"
campaign is one of the many ways dealers are helping out. For over 20
years, the program has been used as a statewide safety net to address
the emergency fuel needs of low-income Vermonters. Visit vermontfuel.com to learn how you can help.
"We would like to thank you for the donation of fuel for our parents. They are being put through some great trials right now and having heat at home was very helpful. They never asked for help before and it was tough for them. Your program is a wonderful thing, keep on the great work you do during a tough time for fuel companies too! We really appreciate it!”
OFFICIAL BIOHEAT® WEBSITE
Toll-free Hotline Educates Dealers and Consumers
The National Biodiesel Board (NBB) this week announced the launch of the official Bioheat® website designed to educate customers and fuel dealers on the amazing potential that is Bioheat®—a new-age, environmentally-friendly home heating fuel of traditional and reliable heating oil blended with pure home-grown biodiesel. Additionally, a toll-free "hotline" has been created to give fuel dealers and wholesalers direct support with technical issues and other inquiries.
Bioheat® Online: www.bioheatonline.com
NORA Unveils New Technician Certification Patches
The National Oilheat Research Alliance has launched a new up-to-date flame as the company's corporate identity. The NORA flame is the primary symbol representing NORA during the last five years. The NORA logo is being modernized into a metallic version that will be displayed on NORA products and it will be used as new patches for NORA technicians. (See sample of Silver Certified patch.) The move to the flame is a key component of NORA's revitalization strategy. NORA partnered with Don Farrell to make the new NORA patch come alive.