Roach Energy offers several ways to buy your propane or heating oil– but deciding which option to choose can be confusing, because each one has its advantages.
As with any big buying decision, it pays to be informed, so we’ve prepared a short summary of each option to help you decide what’s best for you.
Just like stocks on the stock market, the cost of fuel changes from day to day with no limit about how high or low it can go; this is called the market price. If you buy your fuel at market price, you can take advantage of falling prices without having to pay a fee – but if they go up, you’ll have to pay the higher price.
Purchasing propane in advance of heating season at a fixed rate locks in a price on all the gallons you pay for, regardless of when they’re delivered and no matter what happens in the market. This Pre-buy option protects you from rising prices, but it also prevents you from realizing a discount if the market price drops.
A Price Cap program limits how much the price of propane can rise, but not how far it can fall. Propane suppliers charge a fee for Price Cap service because it requires us to buy insurance from our own suppliers in case the market price drops; the fee you’re charged covers the cost of that insurance.
As you can see, each price option has its benefits and risks, which makes choosing an option a matter of personal choice. To summarize:
If you value predictable bills more than the potential savings you might realize if the market drops, choose Pre-buy.
If you are willing to pay a fee to set a maximum propane price while preserving your ability to take advantage of market price drops, choose a Price Cap (available in combination with our Smart Budget plan).
If you want to manage your own propane purchases and are willing to accept the risk that the price might go up, choose a market rate plan and pay as you go).