Diesel prices are rising every day. The cost for a gallon is approaching the highest recorded average of $5,816 in 2022. Some heating oil companies are having to change their daily operations due to price increases.
LONDONDERRY, NH – Home heating oil companies are facing installation costs The pressure as rising crude oil and diesel prices, coupled with tensions in the Middle East, are squeezing margins and disrupting operations across New England.
The recent spike follows a cold winter that boosted demand for heating oil, exposing both consumers and suppliers to higher costs. Companies say they are trying to prevent these increases from being passed on to customers, even as costs rise sharply.
“We had to lower our prices to make the phones ring more. People are waiting on car deliveries because prices are so high, and we can’t blame them,” said Andrew Chesney, owner of Southern New Hampshire Energy.
Heating oil suppliers say volatility in energy markets is complicating planning as rising crude oil prices coincide with rising diesel costs needed to fuel delivery fleets.
Chesney said that a month ago it cost about $8,000 to fill one of their vans with diesel, and today it costs between $12,000 and $15,000. Between fueling four trucks and getting all the oil and fuel it needs, it costs Southern New Hampshire Energy about $50,000 a day.
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“We’re trying to cut corners where we can to save people money, but it’s hard to do that on our end. We’re not making a huge profit at all,” Chesney said.
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Some companies are implementing new policies to control rising costs. In Massachusetts, Atlantic Oil Company posted a disclaimer on their website that read: “Due to recent and ongoing events in the Middle East, we have currently suspended all deliveries under 125 gallons. We have also added a $40 surcharge for orders requiring less than the 125 gallon minimum.”
“We have people coming in, regular customers, saying, ‘You know, I can’t really afford this,’ and we try to help them. We say, ‘You know, we could pay something now,’ because normally you don’t have to pay for your oil in the summer,” said Ted Triandafilou, general manager of Atlantic Oil Company.
Triandafilou said his company is experiencing a similar increase in diesel costs.
“Depending on the size of the truck, we have multiple trucks of different sizes. So it could be over. Right now it costs over $12,000 to fill the truck, while a month ago it might have been $5,000-$6,000.”
Both operators said daily price fluctuations contribute to uncertainty.
“We really don’t know where it’s going to go and prices are going up and down 10 cents to 25 cents a day right now with everything going on in the world,” Chesney said.
“Prices change daily, just like gasoline prices usually do, and I’ve often seen prices go up in the morning – let’s say, go up 20, 30 cents, crazy numbers – and then slowly come back down throughout the day, but by the time the market closes they’re back up again,” Triandafilou said. “It’s getting to the point where I don’t even bother displaying the price outside anymore because I just run out and have to change the price again.”
According to AAA, the average cost for a gallon The diesel price on March 20 was $5.15, close to the record average of $5.80 in 2022.
“The last time we saw diesel prices this high was in 2022, after Russia invaded Ukraine,” said AAA spokesman Mark Schieldrop. “The current situation is a little bit different because we’re seeing significant impacts on production. We’re also seeing all those cargo flows out of the Strait of Hormuz being affected. So there are some long-term impacts here.”
Schieldrop said the record could be broken if the conflict continues. Even if the conflict ended today, prices would not fall tomorrow.
“It’s true that prices skyrocket and then float down like a feather,” Schieldrop said. “It will last a long time, and many analysts believe the impact could last more than a year even if the conflict ends soon.”
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Schieldrop says it can be difficult to cut gas prices to save money.
“We urge people to try to drive less. That’s a tough deal for people who have to drive, but are piling up your trips and trying to drive more economically,” Schieldrop said. “If you ease up on the accelerator, drive a little slower, follow the speed limit, you can increase your fuel economy quite dramatically.”
For homeowners, demand may decline in the coming months as warmer weather reduces heating needs. But for businesses, the seasonal slowdown brings its own challenges.
“We’re actually entering a slower season, so everyone will have to wait until winter to buy heating oil,” Chesney said.
“So things are going to slow down for our employees, and we’re going to have to go through a struggle ourselves to run a business and keep things going until prices come down.”
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Companies like Southern New Hampshire Energy rely on other services, including plumbing, heating and cooling, to offset seasonal drops in fuel demand.
“Support local. We’re a family business. We’re not a corporate business, so we structure our business on a family basis. And we’re just a small business trying to find its way through life right now,” Chesney said.
