Pre-buy vs cap vs budget
Break-even ledger
| Plan | Season cost | vs winner |
|---|---|---|
| Pre-buy fixed (winner) | $3,324.00 | (best) |
| Cap | $3,504.00 | +$180.00 |
| Will-call | $3,490.20 | +$166.20 |
How each plan really works
Pre-buy fixed
You pay today's price for a contracted gallon volume. If market goes up, you win. If market goes down, you locked in too high. Risk: dealer bankruptcy. CT requires surety bond protection. Other states vary.
Cap (ceiling)
Ceiling at today's price plus a non-refundable cap fee (typically $0.20 to $0.40/gal). If market falls, you pay the lower market plus the cap fee. If market rises above the ceiling, you pay the ceiling. The cap fee is the cost of optionality.
Will-call
You call when you need oil, pay the posted board rate. Maximum flexibility, maximum market exposure.
Budget plan
Equal monthly payments over 10 or 12 months. Reconciled in spring. Does NOT change total cost, only smooths cash flow. Useful for households on tight monthly budgets.
Three worked seasons
Normal winter (forecast = today)
600 gal at $5.54: pre-buy $3,324. Cap $3,324 + $180 fee = $3,504. Will-call $3,324. Tie at pre-buy and will-call.
Cold winter (forecast +12% to $6.20)
Pre-buy $3,324. Cap $3,324 + $180 = $3,504 (ceiling held). Will-call $3,723. Pre-buy wins by $399.
Mild winter (forecast -8% to $5.10)
Pre-buy $3,324 (locked high). Cap $3,058 + $180 = $3,238 (market below ceiling). Will-call $3,058. Will-call wins by $266.