Cap Pricing
What is cap pricing?
With Carroll’s Cap pricing program, we put a ceiling on how high your delivery price can rise, but we also guarantee that your price will go down if the market falls. Any time our daily price is below the cap price, you pay the lower amount.
Enroll in Price Protection
Stay protected from heating oil price spikes this winter by enrolling in Carroll’s Cap program. By purchasing cap protection you’ve guaranteed your price will not go above the ceiling price. Rest assured that if the daily price is below the ceiling price you will always pay the lower amount.
Purchasing cap protection is as easy as 1-2-3.
- Enter the number of gallons you wish to protect
- Determine how you would like to pay your cap fee
- Click Submit!
Not a Carroll Customer? Sign Up Today.
Question about Cap pricing?
Frequently Asked Questions
Below you will find answers to the most frequently asked questions. If you have further questions or would like to discuss any of these issues, please do not hesitate to call our customer service group. While we can’t predict which way prices will go, we are ready to explain the cap protection program and help you with your options.
Q: Which way are prices likely to go?
A: We wish we could tell, but it’s like trying to predict the stock market. In the past few months, we’ve seen oil prices soar, then have their biggest drop—over $10 per barrel—in one day. We cringe every time we see some investment bank make a self-serving prediction about what will happen with prices. Many of these same experts were predicting another run-up in prices two years ago—just before the oil market plummeted by over $2 per gallon.
Q: Why does it cost extra for a price cap?
A: A price cap is essentially insurance against rising prices with a huge added benefit—if prices drop, your price can also go down. We can’t think of another product that gives that kind of “two-way protection.”
But no retail oil company can do that on its own. We must buy a type of insurance from our suppliers (a combination of fixed price fuel and financial hedges called “options”) in order to give that to our customers. And the cost for doing that is what we are charging you.
Q: How can you offer two different price caps depending on what we pay?
A: Because that’s how we’re charged. It’s like a deductible in car insurance. The higher your deductible, the lower your insurance price. In this case, the more you pay up front for the price insurance, the lower the price cap we are able to get for you.
Q: Do you recommend I get a cap?
A: Not necessarily. There’s no way to know from year to year which will work out better—getting a cap or just paying our regular competitive market price. It depends on which way makes you feel more comfortable.
Q: Can the ceiling price change?
A: Yes, until you complete your renewal. We buy “price-protected oil” in increments. When that batch is taken by customers, we must go back into the market to get more at prevailing rates.
Q: What is the current cap ceiling price?
A: The price cap fluctuates on a daily basis until your contract goes into force. You can call our office or go online at www.carrollfuel.com and click my account.
Q: Would I be better off waiting to see if prices drop?
A: We are always sensitive to this question, because there’s no way to tell which way prices will move, when or by how much. But here’s how we look at it:
If you are concerned that prices could go up, it makes sense to secure a cap now. Why? Because if you wait and prices go up, so will our cap, and you’ll pay more for your oil. But if you get a cap now and prices drop, you’ll still get the lower delivery rate. (That’s the beauty of a cap versus a fixed rate.)
Q: What if I don’t do anything?
A: You will stay on your regular delivery program at our market rate. You won’t be charged a cap fee, but there won’t be a ceiling on your price.
Q: How is my fee paid?
A: When you choose a cap, you incur this fee immediately. If you just want a cap, you’ll pay up front based on the number of gallons you want to cover. If you go on SmartComfort, we allow you to spread out the payment.
Q: How long does my price cap protection last?
A: Your protection lasts through April 30, 2012, or as long as your price-protected gallons last. That’s why it is so important to estimate your expected use as closely as possible. If you need help with this, call your local Carroll office.
Q: How much fuel should I cover with the price cap?
A: It’s up to you, but please make sure you cover enough of your oil to give you protection for the heating season. Last year, some people covered only some of their fuel and ran out of protection right when they needed it most—at the end of the year when prices rose. Most people cover 95% of the previous year’s usage.
Q: What happens if I use more oil than I cover?
A: Once your supply of price-protected oil is used up, you’ll pay the regular market price on the day of any additional deliveries.
Q: What happens if I protect more gallons than I use? Do I get a refund of the fee?
A: Unfortunately, no. We have to buy the protection up front based on the number of gallons that you protect. That’s why you should protect only the number of gallons you feel comfortable with.
Q: Some companies say they have “free” price caps. How can they do this?
A: The fact is they can’t. These companies actually build the cost of the cap into their price per gallon. Most of them have several different “posted” prices, one for cap customers and various prices for everyone else—and their cap price is often much higher.
But that’s not all. Two years ago, when prices plummeted, these companies came down much more slowly than us. At one point, their customers were paying 60¢ per gallon more than ours were. These same companies usually have early-termination fees in their fine print—so if you think they are treating you unfairly, it could cost $600 or more just to leave them.
We think it’s better to play it straight with you. We let you see the cost of this insurance clearly and up front. Then you can decide if you really want the price cap.
Q: Is my price cap the price I pay for each delivery?
A: No, it’s the highest you would possibly pay all year. Any time our delivery price is less than the cap, you pay the lower amount.
Q: Why don’t you offer a fixed price program?
A: Fixed price programs are great if prices rise, and awful if they drop. Two years ago, customers on fixed prices had to sit by while other customers paid $2 less per gallon. Since prices go up and down, we don’t think it’s smart for customers to leave themselves exposed this way, and so we don’t offer it.
Q: Can I pay my bills monthly on my credit card or EFT?
A: Yes, you can use a credit card. However, many of our customers have chosen to use EFT (electronic funds transfer) instead. Your bank automatically issues us payment for your monthly bill on a specific date. You get the convenience and confidence of knowing your payments will be made so you don’t lose your discounts, and you don’t get hit with big interest charges by your credit card company. Plus, you can get $15 credited to your account now.
Q: If I choose SmartComfort, how do you determine my monthly payment?
A: We take the number of gallons you used last year and multiply this by projected prices for the coming season. This gives us your total estimated fuel bill, which we then divide by 12 months.
Q: What happens if my actual fuel bills are higher or lower than my SmartComfort amount?
A: If our estimate is too high or too low, we can adjust your monthly payment amount accordingly. Additionally, you can review your payment amounts, deliveries or pay bills online in the “my account” section of www.carrollfuel.com.
