Oil Purchase Plans

Important Information Regarding Current Energy Market

As of this time (April 2020), the global energy market has been dramatically affected by the COVID-19 pandemic resulting in historically low energy prices.  This has been caused primarily by demand reduction, over production, and lack of storage space. 

What does this mean for consumers?

It means two things.  You can purchase motor fuels, heating oil, and propane for delivery NOW at historically low prices, but more importantly, you can also lock in your future needs out to 18 months (that’s the limit for residential contracts in Connecticut).  When the economy begins to recover, energy prices will reverse this trend and will increase dramatically at some point. We are strongly urging all Sippin Energy Customers top take advantage of this current market anomaly but securing your future energy needs with our smart cap program.  We continue to recommend our Smart Cap program due the fact that  despite the currently low price, it can always fall lower.  The Smart Cap Plan will continue to protect you if prices fall further.  The cost for this protection is also currently very low.

How do I sign-up?

You can get prices and enroll in any available oil price protection program by clicking on the MY ACCOUNT button (located at the bottom of the Sippin Web navigation bar). or by telephone direct to our Customer Service Department at 1-800-994-FUEL. Prices for these programs are set daily, so you can pick when you would like to enroll in a program.  Oil Price Protection plans are available year-round. All Oil Price Protection Plans are based on estimated annual consumption, and are based on daily market prices.  All Oil Price Protection agreements must be confirmed in writing (or electronic agreement ).  Fixed price and capped price plans have a fee to cover the cost of the insurance provided by Sippin Energy, this fee must be paid at the time the price protection plan is put into affect. By Connecticut state law, all contracted oil purchases are protected by futures contracts, bonding, or stored bulk fuel.


SmartCap (Price Cap Plan)

This plan provides an opportunity to protect you against increases in heating oil prices, and allow you to buy oil at a lower rate should prices fall. By choosing the SmartCap Plan, you will know in advance the highest price you will pay for your UltraBio4® heating oil. If the Sippin Energy posted retail rate falls below the cap rate, you will always pay the lower price!

  • This plan provides protection against dramatic increases or decreases in fuel cost.
  • Ceiling fuel prices for the Price Cap Plan may be higher than other plans because they incorporate “insurance” costs that are used to provide protection against dramatic falling fuel prices.
  • Sippin Energy’s Capped Rate Pricing is based on the Sippin Energy Posted retail price of the day, which is based on statewide price survey averages. Sippin Energy will always be at or below the statewide average.
  • This plan covers a fixed quantity of gallons, and is based on estimated annual fuel consumption
  • Can be included with a 12 Month Budget Plan
  • Discounts available for:
    • Pre-payment
    • Auto Bill Pay
    • Paperless Statements

Flex-Price Plan

This is floating price plan for our exclusive UltraBio4® high-performance heating fuel that’s available at no cost to you.

  • Fuel prices for Flex Pricing are not fixed, but based on a state-wide average of retail fuel prices.  They have historically ranged somewhere in between capped and fixed prices
  • Depending upon your usage, you may even qualify for a prompt payment discount!
  • This program is available at no charge

Fixed Price / Pre-buy Plan

This plan will allow you to purchase your annual supply of UltraBio4® heating oil at an attractive FIXED rate while maintaining the convenience of automatic delivery. This plan is available with several payment options, including:

  • Pre-buy (1-Payment)
  • This plan covers a fixed quantity of gallons, and is based on estimated annual fuel consumption
  • This plan provides protection against increases in heating oil prices. This is beneficial should heating oil prices stay the same or increase
  • This plan does not provide protection for decreases in heating oil prices

Can a contract be terminated?

Yes. An oil price protection plan may be terminated, or liquidated at any time during it’s term. With our SmartCap, there are NO EARLY TERMINATION OR LIQUIDATED DAMAGES FEES.  On a fixed price agreement that is terminated early, a liquidated damages charge must be paid equal to to the difference between the contracted oil price and the prevailing price of the same program at the time of termination, multiplied by the remaining undelivered program gallons.

For example: If 1000 gallons of oil were purchased and remain undelivered at $4.00 / gal and the current rate per gallon is $3.00 / gallon for the same plan, the liquidated damages fee would be $1.00 / gallon X 1,000 gallons or $1,000.00.  This is something to consider if you feel the price of oil is likely to go down below the current level.

Why is there a cost to liquidate a contract?

When a customer requests and agrees to purchase oil on a fixed price contract, Sippin Energy is required by law to immediately purchase and secure that oil for the customer. This is a requirement of the Connecticut Department Consumer Protection Agency, which regularly examines our records to ensure compliance. The dealers cost, selling price and gross margin are at that moment “locked in”. This is what allowed dealers to honor their customers’ locked in price contracts when the price of oil skyrocketed to nearly $5.00 a gallon in 2007/2008. In a falling market, there is no benefit what so ever to the dealer, as the oil has already been purchased by the dealer at a higher price. In essence, it’s like anything purchased that drops in value (stocks, mortgage rates etc), we can’t forecast the future, and we can’t make the value more than it is. As it clearly states on our oil price protection page, customers must fully understand that locking in to a fixed price plan carries a risk that a customer has to accept. Over the long run, consumers have benefited from oil price protection. In fact, in the 15 years Sippin Energy has provided these programs, they have benefited homeowners all but 2 years. But that said, there is always a risk with any “lock-in” program. If this risk is something you wish to avoid, we highly recommend our capped rate program. This program as explained above provides protection from increasing prices, but will allow a customer to purchase oil at a lower price should the market price fall.

Why is there no cost to liquidate a SmartCap contract?

A SmartCap contract is protected by the purchase of a commodity option, which is charged to the customer when the contract is initiated. Once this coverage is purchased, the contracted gallons are protected for both the customer and the dealer.  If the contract is terminated early, there are no liquidated damages fees, however the option protection paid is not refundable.