Letter of the week, 3/17/08: Can you trust your oil delivery/service company?

[David]

F&S Oil slick
Editor:
As a customer of Village Oil for many years, I am still in shock from the events of the last week.

Approximately two weeks ago, as in past years, I went to Village Oil to prepay for approximately 900 gallons of oil. The receptionist seemed very tense and stated that there was no longer any prepaid contract for 2008, however there might be an offer in the spring. Disappointed at the prospect of paying a higher lock-in price and not guaranteed my fuel oil, I left. Little did I know that the receptionist saved me a few thousand dollars and that I would be grateful for her honesty.

I have been following the events involving F&S Oil, Village Oil and Carlson Fuel Oil, as well as others, and I have several concerns. It was very announced in the March 1, 2008 edition of the Record-Journal that Carlson’s had merged with Village and F&S Oil.

My concern is simply this: when Carlson's merged, didn't the company have a lawyer and an accountant to review the F&S Oil Company? Didn't anyone notice that the assets were $3 million and the debt was $10 million? Didn't anyone question why this would be good for Carlson's customers? How can a company knowingly sell pre-paid contracts in good faith when they were aware of their perilous position?

All the parties involved in perpetuating this fiendish ploy should be held accountable and prosecuted for the fraud committed and forced to pay back whatever restitution possible. I am sure when all is said and done, I, along with thousands of other customers, will never see any of our money because of corporate insolvency.

It is my hope that the responsible parties can live with their actions and know how many families they hurt financially and emotionally.
JOHN J. ANZIDEI, WALLINGFORD

[rapuda]

I was a customer of Tuxis-Ohr's for many years but left them due to the pre-pay conditions. I too would pre-pay for 900-1000 gallons of oil which they wanted me to pay up front. That's over $2000 all at once. After doing some research I found Standard Oil. They require you to sign a contract without paying anything up front. You pay as you use the oil. If they go under, all I'll lose is a locked in price.

[Fit 2 Print]

What happens IF you have thousands on depost for pre-paid oil and service and any oil-providing service business fails? What if you don't have enough cash to fill your tank for the rest of the winter?
There needs to be more disclosure BEFORE signing up for services, yes?

[rapuda]

I don't know what you mean by more disclosure. If you mean what happens to your money if the company goes under, I guess the customer needs to ask that question.
When you pay money up front, your gambling with that money. You're taking a chance that the preset price you locked into will be lower than the price of oil when you actually receive it. If the price is lower than your preset price, you lose money. Also by paying for the contract up front, you're taking away money that could've been earning interest somewhere. Now with what
happened to F&S, you're also taking a chance of losing your money altogether. I don't like the pay up front plans.
I think companies shouldn't be able to take money for prepay contracts unless they have a way to cover that money.

[collie]

I never liked the idea of prepayment and am glad now that if my company goes under, all I'm left to deal with is finding another company. It will take Blumenthal forever to get people's money back and they might only get a percentage.

[oldnickel]

the only deterent to stuff like this is to put the perpetrators in jail, for a long time. I bet they come up with the money real fast. PS I'm talking about state prison where they will meet some real fine folks, instead of federal country club prison/jail.

[eds]

The thing I don't understand is why people think gas is more expensive or why people pay $2000 for heating oil in a season. My FIL has oil heat and pays half that for about 2000 sq.ft. He keeps the thermostat at 65-68F. I heat with gas, about 2500 sq ft, and its something like $200 a month during the 4 main winter months Dec-Mar. and $30 per month during the summer mainly for the water heater, dryer, and stove. I keep the thermostat at 62F during the winter. Gas for me is like $800 a season. I don't understand why some people pay so much for oil. It can't be the per gallon price since for a given sq footage, some people pay more and others less for the same oil. I think people need to lower the thermostat and put on a sweater. But that's just my opinion.

[rapuda]

I used to keep the thermostat at 62 before I had kids. Once we had babies in the house I decided it was better to pay for more oil and have the house warmer, then to pay for doctors visits with the kids. As I got used to the warmer temperature I decided I'd rather be warm and pay for the oil verses be cold and wear sweaters. Lowering the thermostat and making your home more energy efficient is definitely a way to save money. It's a matter of personal choice. I keep the temperature at 68 at night, and 69 when we are home during the day. I use 1000 gallons of oil during the heating season for a 2500 sq ft home.

[eds]

My understanding is that there is no conclusive evidence that colder temperatures cause respiratory or other illness. More for peace of mind perhaps. Why risk it, right?

Bacteria, viruses, and the like cause these issues. Weak immune systems, found predominately in children and the elderly provide a breading ground for these diseases to gain strength and perhaps mutate. These diseases then are able to migrate to health adults who may not have been exposed to the strength of the disease. That was the explanation provided to me by a doctor, at any rate.

Some people turn down the thermostat during the day while at work and then raise it in the evening when they are home. I was told by a HVAC guy that this burns more resources in the long run because the furnace is running constantly to heat up cold air. The longer that a furnace runs for, the more efficiency goes down during the time it is on. It is better to heat up the air a few degrees in small bursts over the course of the day than to run it constantly in one bulk session.

[collie]

Here's a dumb (but for me necessary) question - if you live in a home that has an oil tank, it would cost a lot to change over to gas wouldn't it? Would that kind of process depend on whether or not there were gas lines running from the street to your house and if so do you think it would be the homeowner who would pay to run the lines in? I would think that would be comparable to putting a sewer hookup in as opposed to making do with a septic tank. A fortune depending on the logistics.

[Fit 2 Print]

In response to Collie's question:
In my previous home, natural gas was much cheaper at the time than heating oil. Since there was a natural gas line in the street, I had a connection made into my home.

This was VERY expensive, requiring the combined efforts of the gas company (from street to where the pipe entered the house) to a licensed plumber to install proper piping from house entry-point to various destinations (including kitchen stove, water heater and furnace).

No sooner had I done this and paid LOTS of money but what the cost of natural gas went wild -- far more than oil.

My understanding is that oil is still somewhat less expensive than natural gas at this point. Some furnaces can be purchased (or adapted) to use EITHER gas or oil by simply pushing a switch. Whether you use the gas, or not, you still have to pay the regular monthly basic services fees just to remain connected to the service.

Hope this helps...

[rapuda]

You would have to have a gas main in the road in front of your house. I've never heard of a gas company running a main for one house. They would only do it if the whole street was going to convert. You could always convert over to LP gas, but I believe that would cost more than oil.
Remember, if you had natural gas, there is only one supplier of that. With oil, you can choose your supplier. Research the pro's and con's of each.

[collie]

Thanks for all your answers.

[jma]

It was going to cost us $10,000 to run a gas line from the house across the street to ours. We use oil to heat the house, and propane for the stove and dryer.