When is “Downside Protection” a Good idea?
Why Consider Adding Downside Protection?
In volatile market conditions, adding the Downside Protection option to your plan provides a safety net for heating oil and K-1 deliveries. Downside Protection guarantees that if market rates fall below your locked-in contract price, Colby & Gale will charge your account our lowest daily posted rate on the date of your delivery.
By opting for cap protection, your price is secured against market spikes while remaining flexible enough to capture savings if prices drop during the heating season.
Case Study: How Downside Protection Safeguards Your Budget
Historical price swings illustrate how downside capping protects heating budgets. During the 2008–2009 heating season, retail heating oil prices dropped from a record high of $4.63 per gallon in July down to $1.86 per gallon by March 2009 due to broader economic shifts and reduced global energy demand.
Customers who had added Downside Protection to their Pre-Buy contracts were able to take full advantage of those falling rates on every delivery—saving significantly over the course of the winter compared to a standard fixed-rate plan.