Heating-oil customers trying to break high-cost contracts

HARRISBURG - A growing number of the heating-oil customers who signed fixed-price contracts as costs spiked over the summer are trying to back out of those deals as the price of oil collapses.

Some of the customers who have read through the fine print are finding buyout clauses that can cost hundreds of dollars - but that still provide a relatively cheap escape from contracts signed at the peak of an energy crisis.

When the price of crude oil peaked in June and July, the wholesale price of heating oil was more than $3.70 a gallon, according to government figures. In November, those prices hovered around $1.80 a gallon.

Including the cost of delivery, a customer who signed a contract for 1,500 gallons of fuel over the summer would pay more than $6,000 for the entire winter. At today's spot prices, a customer would pay about half that.

Dealers say the vast majority of customers have not dumped contracts. But some say they have no choice.

Tekla Andruchiw's tab of $4.69 a gallon for heating oil translated into an eye-popping $530 bill last month.

"I just couldn't believe I got myself in such a big mess," said Andruchiw, a widow who lives off Social Security in Jamison, Bucks County.

The retiree already had borrowed money from her daughter and son-in-law to pay the bill. When she saw a Martz Oil TV ad promising rock-bottom prices, she borrowed $395 more to break her contract.

At Martz Oil's new customer price of $2.09 a gallon, Andruchiw will begin saving money by mid-January.

Customers who call state attorneys general, welfare agencies, and consumer advocates for help are being advised to look for a buyout clause in the contract or to try negotiating with their dealers.