What the Heck is "Rack Plus"??

The official governmental definition of "Rack Plus" is "Wholesale or rack price" means the price at which gasoline or diesel oil is made available to a retailer or dealer; exclusive of freight, taxes and differential (futures contract add on cost). Though for oil, the commodity price is ultimately determined by the NYMEX commodity market/bid price for the day plus 10¢ to 12¢ for freight, etc, in actuality, much of the oil is simply purchased at the terminal in Portsmouth, Boston or Portland, including the freight, differential, etc..

Fuel dealers refer to this as "landed cost", the base cost of the fuel they buy. To this they add their margin, an amount sufficient to cover their costs of delivery, administrative costs, and profit. Because of the volume OTEA provides, they operate at a much lower profit level than usual. Normally, fuel dealers like to operate at at margin of sixty to eighty cents plus.

How Can I Check their Prices?

Will we tell you the margin that we have agreed to with the company? The answer is no. Fuel dealers are entitled to their privacy like anyone else. However, you can roughly figure it.  The easiest way to check after a delivery is to call a couple of companies (including your own) and ask for today's cash price.  Make sure that you call on the same day or within a day or so of delivery. Remember, prices go up and down daily.

If you have extra time on your hands, you could go to the US Dept. of Energy Website. They include Spot Prices (wholesale) for heating oil and other useful info. Keep in mind that they are averaged NY prices for the week and 10¢ to 12¢ lower than New England. A sample of their charts is below:

No. 2 Distillate Spot Prices (Cents per Gallon)

If you have time to kill, i.e. retired, you can check the commodities market or follow it yourself. Go to this Website . Scroll down to "Energy", then click on "Heating Oil". It shows you the prices for futures for 36 months, starting with next month. To roughly figure what you should have paid for a delivery, click on next months future to  open it, and look at the several days before your delivery. Average that price and add about 12¢. What's left is margin.  It's generally  impossible to be 100% accurate. You don't know if they bought the oil last week or three weeks ago.  But if you have a stretch of several weeks where prices don't change much., you'll be able to pinpoint it.

How Much Did I Save

The checking methods above are an academic exercise. What you are really concerned with is how much you saved! What you definitely saved was the difference between normal fuel dealer markup and our lean & hungry dealers. If winter prices don't exceed today's pre buy prices of $4.54⁹/gallon to $4.94⁹/gallon or drop below, you also save the difference between what you would have paid if you were locked in with a Prebuy/Fixed Price deal and what you actually paid with "Rack Plus". As of today, June 26, 2008, Rack Plus prices for Sept, October and November 2009 are cheaper than the lowest pre buy we know of.  Of course, this could get better or worse.