Home > Blog > The Big Three

The Big Three

In the past, the big three have always been referred to as the auto industry’s biggest players such as Ford, Chrysler and General Motors. In our industry, I call liquid petroleum, natural gas, and fuel oil our big three.
Almost on a daily basis, especially with the 2013/14 winter just around the corner, I get questioned on what I think the price of oil, LP gas and natural gas will be this season.
I have often said in the past that my crystal ball broke along time ago when it comes to guessing the price of our heating products. When considering the price, one must keep in mind that the fuels we use are now a traded commodity, and the pricing is contingent on the trade value of the product on any given day.
Based on the market value, the price to the consumer will be adjusted almost daily. Also, with the advantage of the Internet, many companies and home owners are now utilizing online services to see what the different fuel products have traded at.
On the marketing side, I have noticed more aggressive advertising both on radio and TV, stating that LP and natural gas products are the cleanest of all the fuels and more efficient than our No. 2 fuel oil.
It also seems that the natural gas companies appear to have the deepest pockets when it comes to marketing their products. I hear quite often that oil companies are seeing their once healthy account base dwindle as their customers convert to gas, which seems to be an every day occurrence, so I’m told.
I’m also asked which equipment provides the best and most efficient heat source based on our big three energy sources. I’m partial to one of the big three I mentioned, so my suggestion is to do the research and decide for yourself, which best meets your needs.
Along with product price discounts, there is another factor that seems to be key when a customer decides to make the conversion from oil to gas. That is the attractive equipment rebate programs that are being offered by the gas companies that average around $1,000.
Also on the equipment side, a lot of the condensing gas boilers seem to be the choice selection, because in addition to the rebates and the higher-than-oil equipment efficiency, there is a smaller footprint and no oil tank is required. On average, the condensing gas units are getting in the mid to upper 90 percent efficiency while oil, with the exception of a couple of boilers, is averaging efficiency at about 87 percent.
There has been and always will be the debate on which fuel has the higher Btu value. Is it the standard No. 2 fuel, LP gas, or natural gas? For those of you who may not know the value of the different fuels mentioned, LP gas has approximately 91,000 Btus per gallon, natural gas has approximately 102,000 Btus per cubic foot and No. 2 Fuel Oil is rated at about 140,000 Btus per gallon. I would suggest that most oil heat dealers will say, based on the Btu value, fuel oil will always prevail as the winner in the area of best buy for the buck.
In addition, some contractors have mentioned that there is a fairly high price for installing a new natural gas line into a home, and I have also been told by some LP consumers that there is often tank usage fees added on to the propane bill. I would guess that this is related to the annual product used. Of course, if this is the case, then these costs need to be included when comparing prices of the products.

Leave a Reply

Your email address will not be published. Required fields are marked *

*