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Thu February 27, 2014
Regulating Oil Pre-Buy Contracts: The Dealer Perspective
The head of the state’s Consumer Protections Bureau continues to advocate for changes in state regulations that would give customers more protections when entering oil pre-buy contracts. Rob Stenger, Chairman of the Oil Heat Council of New Hampshire, says while that organization generally supports some changes, they oppose regulations they say would pose undue burden to dealers. When I spoke with Stenger, he began by explaining how the business of pre-buying heating fuel has changed in recent years.
The landscape has changed… (pre-buy contracts) simply don’t work the way they once did. The market is not as predictable.
So what is the benefit of pre-buy contracts to the consumer and the dealer?
The benefit… some 12 of the last 14 years… consumers that have paid up-front… have realized a savings compared to the average retail price. The benefit to the dealer is the ability to anticipate future need and hedge contracts with wholesalers.
The Consumer Protections Bureau argues more protections are needed for consumers following some dealer bankruptcies in recent years that left customers without oil or their money. Do you agree?
We have an obligation to protect the consumer, and by and large our membership has met that obligation for years.
So some of those failed dealers may not have been meeting the current statute?
What we see year over year is dealers that follow the letter of the law don’t have interruptions in delivery and don’t leave their pre-buy customers short. So I think there is adequate protection in place.