Tue 10 Oct 2006
American Consumers on short end of Energy stick
HAGERSTOWN, Md. - When James Schwartz signed a contract last summer locking in home heating oil for the winter at $2.79 a gallon, it seemed like a safe bet. Crude oil prices had surged and gasoline was above three bucks a gallon. Could $3 fuel oil be far behind?
But crude has dropped nearly 25 percent from its mid-July peak of $78.40 a barrel. And other heating-oil customers in the Baltimore area are paying as little $2.12 a gallon to heat their homes — 24 percent less than Schwartz is paying.
Schwartz, a 61-year-old social worker and retired Navy officer, learned a lesson about speculating on commodities, which is what he did by locking in a future price.
Customers often pay a premium_ about $40 a year in Schwartz’ case — to lock in a price. The contracts typically have cancellation clauses requiring customers to pay a penalty — about $100 in Schwartz’ case — to void the deal.
Schwartz, who lives with his wife and their cat in a three-bedroom, 2,400-square foot home about 15 miles west of Baltimore, said he decided after some calculations to stick with his fixed-price contract rather than pay the cancellation fee.
“If I buy out of it, I’m going to end up paying $140″ in contract fees he said. “It would take two and a half to three deliveries of oil for me to make up the difference.”
======================================================================================= This whole notion of “contracts” for consumables is an absolute fraud especially Cell phone contracts where they require two years and they get away with “automatically” renewing the contract if you make the slightest change or even call them with an issue.
It’s downright fraud and should not be tolerated by the American sheeple.
What’s next a contract to buy a certain amount of cereal at a certain price at the grocery store???
