The per-litre retail cost of home heating oil in the county Friday averages between 99.9 cents to $1.029 for residential charge accounts and some companies offer 97.9 for cash on delivery at the door.
Wade Sullivan, owner of Ballantyne Fuels in Pictou County, said oil prices in Pictou County haven’t been this low since 2011.
“It has gone down 26 cents so far this year,” he said. “It started at 1.29 and today it is 99.9. This is great for us. It’s cheaper, more people are using it a little freer and customers are happy.”
According to the website gasbuddy.com, the reason oil prices are at a low right now is that the world is “awash in oil… for the moment.”
The price of oil is determined by many factors including the environment, natural disasters and political or military unrest. Canada is a participant in the global oil market, where buyers and sellers trade volumes, mostly based on short-term contracts. This interaction sets the world price of oil.
According to the National Energy Board, Canada is the sixth largest producer in the world, but it produces only about four per cent of total daily production, so it has little influence on the world price of oil. As a result, Canada is a price taker, rather than a price setter. The price of crude oil is most commonly quoted in $US dollars per barrel.
Local oil companies purchase their product from suppliers and sell it based on the price they bought it for with a little bit of profit built in. All of the province’s oil products are picked up in Dartmouth.
Some local residents might question why oil, like gasoline, isn’t regulated,
Dan MacGillivray, owner and manager of MacGillivray Fuels, said oil furnace oil is cheaper in Halifax for residential customers because oil companies there don’t need to truck their product to a different location or store it for future use.
He said companies in Metro can pull their trucks up to the tank, fill up and then go directly to a customer’s home. Some businesses in the province’s capital also have low overhead because they involve only a truck, a driver and cellphone.
MacGillvray said neither he nor his customers are complaining about the low price of home heating oil in Pictou County. The sale of oil had gotten off to a slow start because of a warm fall and winter in 2014 as well as a late fuel-up for customers last year.
“A lot of people got an extra fill-up in June because of the weather so some people are just getting their fill-up for this season now,” he said.
Both Sullivan and MacGillivray said they expect to see the prices of oil to continue on this low price or even lower for a while longer.
“By the looks of how the market is going, it will continue to drop a little farther,” said Sullivan.
