MANCHESTER — A year ago the escalating oil prices were creating a financial strain for consumers. Today, because of precautions taken as a result of last year's prices, some may be in a position to save.
One such entity is the Bennington-Rutland Supervisory Union (BRSU). Last year the BRSU locked in a rate of $4.29 per gallon and udgeted a little more than $164,000 for heating oil. Due to the increased costs, they increased the amount to $246,000 when developing their budgets for the coming fiscal year. However, with prices having declined and the BRSU now having locked in a rate of $2.41 per gallon for the coming year, they stand to save a substantial amount of money.
"Just looking at the price per gallon differential we're thinking it's going to be about 50 percent," said BRSU Superintendent Daniel French.
While French said that the nearly 50 percent savings was "positive news," he was uncertain as to whether or not it would result in a net savings. Though fuel is a significant expense in the BRSU's budget, French said that largest expenditure was personnel and that it had more of an impact than heating costs.
Last year's elevated prices also had an impact on not only the Town of Manchester, but other municipalities throughout the area. Currently, Manchester is spearheading an initiative for neighboring towns to partner together in a effort to receive a reduced price on the cost of not only heating fuel,
According to the Vermont Fuel Price Report published by the Department of Public Service, the average cost per gallon of heating oil in June of 2009 — which was $2.31 — is nearly half of what it was at the same time last year.
Though the price may be nearly half of what it was a year ago, some dealers have said fewer people have pre-bought this year as opposed to last.
"Forty percent less have pre-bought this year," said David Farrar, General Manager of Miles Fuels. "More locked in last year than this year because it was more of a scare last year."
Whether or not the price of oil will increase in the coming months remains to be seen. Matthew Cota, Executive Director the Vermont Fuel Dealers Association, said the prices are driven by speculators who are essentially making a bet on what will happen to the price of oil and through the loopholes in the law they are able to drive up the cost of energy.
"Hedge funds and investment banks are currently allowed to predict the future price of oil, gain control of the physical asset, and then trade energy derivatives — essentially side bets — that the price will go up or down," said Cota in an e-mail. "Most of these trades happen in dark markets' beyond the reach of federal regulators."
Cota continued to say that Congress needed to impose the financial reforms necessary to stop speculators from increasing the cost of fuel.
According to Cota, experts have said that crude oil prices could reach as high as $90 per barrel or fall as low as $40 per barrel this year. As of press time, the price per barrel was about $70.
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