Dear Customer and prospective customers,

Well we've made it through another winter. You have seen the price you pay for a comfortable home rise considerably this season. Some of you have taken that in stride, however most of us need to be more concerned about the cost of that comfort. Along these lines, I would like to speak to some issues you may have.

Research surveys tell us that many of you believe we make more money as a result of higher prices. Others believe we wait to make deliveries when prices are highest. Some others of you may be actively looking to mitigate that cost by finding another fuel source. Needless to say, price spikes cause much speculation and consternation.

Let us make one thing very clear. We do not make more during spikes and we do not wait for higher prices to make deliveries. Those who make the most money are those who are smart or lucky enough to have supplies secured before prices rise. However, the same would have lost money had the price dropped.

We generally run a scheduled route system for "will call" customers and computer generated routes for those many of you who are on "keep full" status. Our computerized degree-day system generates delivery tickets based on prior deliveries and area temperatures. So we deliver based on need.

All consumer energy (electricity, heating oil, propane, natural gas and gasoline) prices are set on the open commodities market. The biggest influence, by far, is the price of crude oil. The buyers of crude and gas liquids are affected by everything from weather to anything that may interrupt the crude supply. In recent years, another factor has been added to a list of factors that effect fuel prices. The now very large speculative market is pushing prices higher. There is so much money being pushed in to commodities markets that raise, even higher, the price that we all ultimately pay. So, the normal supply and demand issues that have always been a factor now have the added concerns of a fairly new group of buyers–hedge funds and speculators. There are many circumstances affecting the markets, when things get really crazy (volatile); it is very much like the “perfect storm…” The bottom line: all energy costs more now than ever.

The difference in our (Central's) purchase cost and our selling price is our margin; but that is not our profit. From that margin; we pay wages, insurance, truck maintenance, general overhead and the wholesale price of the particular product concerned.

More than a few things to think about but all valid. Depending on your particular wants and needs we at Central Oil are always prepared to serve you in any way we can. We work hard to have a ready supply of product at fair prices and want to serve you. We encourage you to get on a "keep full" status and choose a budget option to help stabilize your monthly cost.

As usual there is more information available. You can check our website or call us to find out about energy saving tips, energy concerns, budget plans, products and services.

We look forward to serving you.

Sincerely,
Don Thacker
President, Central Oil of Virginia