How to Check a Prepaid Heating Fuel Contract Before Signing

A pre-buy or guaranteed price plan takes your money in the fall and delivers oil, kerosene or propane through March, which makes you an unsecured creditor of a fuel dealer for the whole heating season. The wrong assumption is that the money sits in an account with your name on it. It does not. Dealers have gone under mid-winter still holding prepaid deposits, and the states that responded did it by regulating the contract, not by insuring your deposit. Check these terms before the payment clears.

Confirm the dealer is registered to offer prepaid contracts

Maine requires any dealer offering prepaid home heating oil, kerosene or liquefied petroleum gas contracts to register with the Department of Professional and Financial Regulation every year by June 30, and to file an Annual Report for Prepaid Contracts by October 31. By September the current registration is already on file, so a company you cannot find in the register is a company to ask about. The department's prepaid contracts page carries the company search. In other states, start at the state consumer protection offices directory and ask that office whether fuel dealers register locally, because many states have no prepaid rule at all.

Get the price plan in writing before you pay

Maine's statute on price protection and prepaid contracts requires a guaranteed price plan to be in writing, with the terms in plain language, printed in at least 12 point boldface type, placed immediately after the pricing language. A price quoted on the phone during a cold snap is not a contract. Ask for the document, and read the block of bold text rather than the rate on the flyer.

Read how the dealer secures your money

The same statute gives a dealer three ways to back the gallons it has promised, and the contract has to say which one applies: fixed-price supply commitments covering at least 75 percent of the maximum gallons committed across all its prepaid contracts, a surety bond worth at least 50 percent of all prepaid funds, or a letter of credit for 100 percent. Only the letter of credit covers the full amount, so note which box is checked.

Check the gallon cap and the refund term

The contract must state the total money you paid and the maximum number of gallons the dealer is committed to deliver. Divide one by the other and confirm the result matches the advertised rate. The Maine Attorney General's heating fuels guidance adds that the agreement has to provide for unused funds to be refunded within 30 days, which is the term that matters in a mild winter.

Compare the locked rate against the published survey

The federal Heating Oil and Propane Update publishes residential prices by state and region every Wednesday after 1:00 p.m. Eastern from October through March. As of September 2026 that page notes the series is paused for the off season and returns in October 2026, so compare an offer made now against last season's closing figures on the same page.

If the dealer will not put the security method in writing. Treat that as the answer and walk. In Maine, the Consumer Protection Division takes complaints at 1-800-436-2131 or 207-626-8849; elsewhere use the state directory above.

If the cost is the real problem rather than the contract. Fuel assistance is a separate track with its own deadlines. See how to apply for LIHEAP help with heating bills.

Sources. Maine Revised Statutes Title 10 section 1110, Maine Department of Professional and Financial Regulation, home heating oil prepaid contracts, Maine Attorney General, home heating fuels, U.S. Energy Information Administration, Heating Oil and Propane Update, USA.gov state consumer protection offices.