Heating oil is a distillate fuel sold mainly for use in boilers, furnaces, and water heaters. U.S. refineries supply most of the distillate demand, however, imports from Canada generally supplement supplies during the winter when demand is high. Refiners have limitations on the amount of heating oil they can make. Therefore, heating oil produced in the summer and autumn is stored for delivery in the winter.
Distillate products are moved throughout the United States by pipelines, tankers (ships), barges, trains, and trucks. Some suppliers send heating oil directly to storage terminals for distribution or to a central distribution area, such as New York Harbor. It is then transported by rail or barge to other storage facilities in the Northeast. From those facilities, it is transported to smaller storage tanks close to retail dealers.
The Bottom Line
After retail dealers receive the oil, an upcharge -or margin- is determined so they can set a price for their customers. The margin covers multiple transportation and storage fees, operations and insurance costs, AND finally – a profit so they can make money.
CECI Oil is a not-for-profit oil cooperative. Our members ask why our prices are lower than competitive oil dealers. The explanation is simple! By charter, we CAN NOT charge a profit margin. If we don’t earn a profit – that’s an immediate savings right there!
For more information on how you can save with CECI, give us a call!
