Updated 10-21-2026
I wanted to update this post, because I’ve gotten a lot of questions and concerns from our customers with regard to the worldwide heating oil/diesel fuel shortages, so our focus is now more on supply rather than price. You may have also read about diesel shortages, and to be clear, diesel and heating fuel are essentially the same product. Heating Oil is not taxed, but requires delivery to home costs, which are about the same as the taxes. Here is a partial list of reasons why:
- Renewed tensions in the Middle East have put pressure on all energy prices.
- New England heating oil / diesel inventories are very low compared to the last 5-year average.
- Continued attacks by the IRGC (which is restricting the flow of crude oil and refined products) have resulted in several refineries being attacked and taken off-line. No clear agreement has been reached on the Strait of Hormuz, and the risk premium of shipping through that route has added considerable cost to shipments.
- Ukraine / Russia war has inflicted major damage on Russia’s refineries, taking massive amounts of diesel/heating oil (about 11% of global supply) off the world market. Much of this damage is significant and won’t come back online this year.
- Conflicts by Houthi rebels have disrupted shipments in the Red Sea and have continued with attacks on Saudi Arabia’s airports and petroleum facilities.
- Refineries throughout the Persian Gulf have been attacked and damaged including UAE, Kuwait, Qutar, and Saudi Arabia. Some damage is short term, some of it is significant and will take months to repair. These facilities are also subject to being attacked again in the future.
- Some countries have stopped exporting heating oil / diesel.
- Europe has now announced a release of some of its diesel SPR, which may provide some temporary relief on supply.
- The US has made a deal with Russia to import some diesel fuel over the next 3-4 months. While this may increase supply, the deal has been met with considerable resistance. It also depends upon both Ukraine and Russia to cease attacks on energy infrastructure, which as of this writing has not happened. This will most likely have little impact on lowering prices but may limit potential increases.
- Also worth considering, is that heating oil is delivered in diesel powered trucks which average about 4-7 MPG. Diesel fuel is now averaging $6.00-$6.50/gallon nationwide, considerably adding to delivery costs.
Some good (relatively) news:
- Higher costs for diesel will reduce demand and increase supply, but the harvest season and heating season demand cannot be avoided.
- Persian Gulf oil flow has returned to pre-war levels, although at a much higher price due to logistics and shipping costs.
- The US is still producing record breaking amounts of crude oil and refined products.
- We have had one of the lowest hurricane seasons in years, so there has been little disruption of US refining capacity.
- Propane prices have gone up but have only been affected modestly.
- Despite the higher costs of diesel/heating oil, gasoline prices have been easing off recently.
What do we recommend?
Despite the higher costs, we are recommending:
- Capped rate program: A capped rate plan may be a solution for some customers. It limits the rate at a ceiling price based on future heating oil costs. This plan provides some insurance against unexpected rises in price but also requires a one-time “cap fee” which is the insurance we use to secure the fuel for you and ensure downside protection.
- Budget plan which splits your annual heating and service costs evenly over 12 months, the budget monthly payment would cover all of your costs, including price protection fees as well as service plan costs.
- Auto Bill Pay Program This will ensure your account is always paid on time, and deliveries will not be disrupted.
- Possibly converting to Propane if your heating system and/or fuel tank are older than 20 years. (see information below), as of this writing, propane for central heating, can save over 50% on heating costs.
- Above all, do what you can to conserve energy. That should be very helpful to many people. To discuss pricing options, contact our customer service staff at 1-800-994-3835
Above all, Sippin energy is committed to the security of your home heating needs and will make sure that our products and services remain uninterrupted in the future. If you have any questions whatsoever, please feel free to email our customer service staff at csr@sippin.com
Thank you for your understanding and continued support.
Gary L. Sippin, President, COO