How To Choose The Best Pricing Plan For Your Factory's Heating Oil

If you're looking for a new heating oil delivery company, then you have to make some basic checks before you choose a provider. Your delivery company should be able to supply the right type of oil in the right quantities. They should be able to meet both regular and emergency delivery needs.

You also have to consider pricing. While you want value for money here, delivery companies might offer you different pricing plans. For example, you might have to choose between variable, fixed, and capped prices. Read on to learn more about these options.

How Does Variable Pricing Work? 

If you set up a variable pricing plan with your heating oil delivery company, then you always pay market rate prices. Your supplier will charge you based on the current cost of oil on the day of your order or delivery.

Variable rates have some advantages. If the cost of oil goes down, then you pay less for delivery. However, there might be times when the cost of oil increases. Here, your costs will also go up.

Some companies find that variable pricing suits them. Low costs typically even out high costs over a period of time.

How Does Fixed Pricing Work?

Fixed pricing smooths market fluctuations and gives you cost consistency. Here, you set up a contract with your delivery company to pay for your oil at a fixed unit price for the term of your agreement.

Some businesses prefer this model because it makes their costs completely predictable. You will pay the same amount for your oil no matter what happens in its market. So, if the price of heating oil goes up, you'll save money.

However, fixed-price plans have a downside. If the market rate for heating oil goes down, then you won't see any benefits. You still have to pay your agreed rate.

How Does Capped Pricing Work?

Capped pricing plans include elements of both variable and fixed options. Here, your agreement includes a capped unit price.

You pay variable rates for any heating oil deliveries that cost less than the capped price. So, you benefit from downward fluctuations if prices decrease at any point.

However, the cap gives you a safety net. If the cost of heating oil rises above your cap, you don't have to absorb higher prices. You won't pay more than your capped rate.

To find out more about prices and plan options, contact heating oil delivery companies.