bennor
join:2006-07-22
New Haven, CT
| F&S Oil of Waterbury abruptly closes
FYI - F&S Oil abruptly closes.
»www.wfsb.com/news/15541134/detai···psp=news
"Other companies owned by F&S Oil including Village Oil, Bosse Oil, Graziano Oil, U.S. Fuels and Carlson Fuel are also affected and will likely stop delivering oil." |
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Rick
Premium,MVM
join:2001-02-06
Waterbury, CT
clubs: 
| This is really bad here in my area. In talking to some friends this morning..I know 3 families on my street alone who are screwed because of this.
And, the story is saying 12,000 families are affected.
That really sucks. And even moreso for the "2,000 to 3,000 customers who prepaid"
I wish I could feel optimistic about the AG's statement..
"we will get their money back," said Blumenthal."
But I'd highly doubt that is how this will play out.
More often than not..failures like this have left the bank accounts dry..and the credit lines maxed out.
Something really went wrong here..and I can't help but to wonder whether other companies are at risk of the same thing with these out of control fuel prices. Purely speculating..but maybe the problem is these companies made price commitments for locked in rates..and with the prices up so much..have simply bankrupted themselves trying to buy their own oil to meet those agreements?
I don't know..but 12,000 families getting slammed around here in this area is a very big deal that others should pay heed to.
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The Coyote captured the RR! Roadrunner Rick is now Comcastic! |
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Rick
Premium,MVM
join:2001-02-06
Waterbury, CT
clubs:
| More news from the waterbury paper.
"Anthony Millo, a Naugatuck resident who has dealt with F&S for nearly 30 years, said the company delivered only 100 gallons of oil to his house last week, failing to fill up his tank as it normally does. When he called to find out why the tank wasn't filled, he was told the company had a problem with the pump and would bring him the rest of the oil on Friday.
"What bothers me the most is that they lied to me and now I have no oil company," said Millo, 59. "You prepay only to learn that you lost all that money and that the company has shut down."
Six weeks before it shut down, F&S Oil Co. sent letters to its customers urging them to sign up early for the 2008-09 heating season. One of its plans, called the "Peace of Mind Plan" promised to lock customers in for the season at a cost if $2.989 a gallon or less.
Constance Copes of Waterbury signed on, recently sending the company about $3,000 to lock up her heating oil for the upcoming season. Like the 2,000-plus other customers who prepaid for their oil, the 85-year-old widow was shocked to learn that the company has been doomed by financial problems.
"I'm trying to stay independent, but I don't know what to do," Copes said. "I was practically hysterical when I found out what happened."
»www.rep-am.com/articles/2008/03/···3403.txt
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The Coyote captured the RR! Roadrunner Rick is now Comcastic! |
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gregamy
join:2003-05-22
Middletown, CT
| reply to Rick
said by Rick  :...I can't help but to wonder whether other companies are at risk of the same thing with these out of control fuel prices. Of course they are. Oil companies make contract to buy the same way we do, they just do it on the wholesale market. A properly-run oil company will determine what contracts it can buy for the upcoming year and use that as a cost basis for offering contracts to the consumer.
I have NO CLUE what happened in this incident. But, with the price of home heating oil skyrocketing, the oil company's costs are skyrocketing, and they have overhead to deal with, from building, to employees, to fuel and maintenance for a fleet of trucks.
Expect your oil costs to go vertical in 2008. I locked in a 2007 pre-buy at $2.52; I have no illusions that it'll be anywhere near that this year (I'm expecting $3.50 or more...) |
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gregamy
join:2003-05-22
Middletown, CT
edit:
March 9th, @03:12PM
| reply to Rick
And here's something much more important, now that I give it thought: the failure of 5-6 oil companies serving 12,000 families leave a HUGE void in the supplier market. That void will eventually be filled, but in the meantime the remaining local suppliers are going to have to find a way to supply 12,000 homes with oil. Oil that the suppliers don't have contracts on. Oil they're going to have to buy on the spot market in order to re-sell to consumers. During a period of record high oil, gasoline, and distillates prices. All while still maintaining existing service to existing customers.
Drastically and suddenly reduced supply + reduced suppliers + high demand + high material costs = SIGNIFICANTLY higher retail oil prices.
Even worse for the rest of the area - and probably most of Connecticut - is that these prices are not going to be isolated to the specific affected areas. Suppliers and wholesalers from around the state are going to have to be a part of this mess. This means that this supply mess will have ripple effects all over the general region, probably to S/SW Mass and certainly to eastern NY, and no doubt as far east as the Colchester/Willimantic area, if not farther.
The only saving grace is that we're just starting to pull out of the depths of winter, and for the most part the bone-chilling temps are all done. This is the time when business begins to slow down for oil delivery companies, so if everyone maintains calm and doesn't try to keep their tanks filled to the brim we'll be mostly OK.
But, if you want to cry for someone, cry for yourselves and everyone else around you...'08s gonna be tough... - GA |
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bennor
join:2006-07-22
New Haven, CT
| reply to Rick
What's interesting is this bit from the rep-am.com article: "The company is required by state law to buy at least 75 percent of the oil it's accountable for in advance, or to put up a bond securing the contracts of its prepaying customers."
I wonder if they had a bond secured or if they just took the money and ran. There are some interesting responses in the comments section of the rep-am.com stories from people who claim to be either employees or former employee's and about what (possibly) brought down the company. And it's kind of funny to see their website (»www.fsoil.com/) is still up. |
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Rick
Premium,MVM
join:2001-02-06
Waterbury, CT
clubs:
| It doesn't sound like a case of "took the money and ran".
This company was in business 70 years. This run up in fuel prices must have been devastating for them and beyond their wildest expectations. In reading the comments, it sounds like the company founder did everything he could to try to save the company. And time just ran out and it was the banks who pulled the plug, refusing to loan them any more money.
I mean..to have employees there who lost their jobs still praising him says something about the guy I think.
It's good to read about the bonds that were required. Hopefully the company was compliant with that. I guess we'll have to see.
It sounds like their employees were given zero warning. A call at the dinner table. That's rough to deal with as well.
Hopefully this isn't the start of a series of these events.
Read the comments from another company in the republican story and things sound pretty shaky there as well.
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The Coyote captured the RR! Roadrunner Rick is now Comcastic! |
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wholesaler in ct
@conversent.net
| f&s owes my company almost 4000 bucks for heating equipment they purchased but never pd for....that was 5 months ago!!!....they were pd for the installations....so..my guess is poor management..i am sure the owners of f&S HAVE OIL IN THIER TANKS AND MONEY IN THEIR POCKETS!!!!!!!!!!!!! |
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Glenn
I'D Rather Be Skiing
Premium
join:2000-10-05
Wallingford, CT
| reply to bennor
They must have seen the writing on the wall. I talked to two people today who had them as a supplier. They both said on their last delivery, they only delivered 100 gallons...regardless of how empty that tank was. One was pre pay, the other paid after deliveries.
It's rough to see something like this happen. Not only does it effect the customers, but there are now a large number of unemployed individuals.
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Legal ATVing in Connecticut? |
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Rick
Premium,MVM
join:2001-02-06
Waterbury, CT
clubs:
| reply to wholesaler in ct
Poor management or..something that even the best management couldn't foresee and control?
Not to defend them or anything because I don't know their management from jack personally..but I do know this companies history somewhat in this area..and it's a VERY long one.
70 years in business for a family operation like this is quite a feat and you don't get to that point without having been able to weather all kinds of storms over the decades.
I think the biggest question here is what took them down..and is this just the start of a big ripple effect..like the mortgage industries mess?
I mean...look at us as consumers and the price of fuel now.
It's outrageous to say the least. Thinking about these companies business models though, it's apparently built on one of promising customers who want it a locked in price and then having to deliver no matter what the price winds up being. And so, imagine you or I promising someone that we'd deliver your 400 gallons of oil for a buck less than it now costs us. And that's just ONE family for one fillup.
It's not hard to see how this could all quickly get out of hand with prices going crazy..as they have in the recent past.
The story seems to suggest there are safeguards that are supposed to be in place for this and for them to either have ample supply to meet those needs or bonds.
It sounds like the supply wasn't there and maybe they were using their past experience to try to gauge the market themselves and figured that prices would come down somewhat.
This time.that didn't happen though..and it's been nothing but up and up.
I really can't help but to wonder how widespread this is and if this is the only one. Companies could be racking up huge losses and using credit lines..and this might just be a house of cards getting ready to come down..like the mortgage mess did.
I hope not. But I just think that this energy issue we're all facing in one way or the other has ramifications that we haven't even considered yet unfortunately.
I'd be staying away from prepaying anything to anyone in this market. That's were the losses can occur to individuals. It's very sad to read of these people losing 3 grand and more. C.O.D. might be the way to go for now folks.
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The Coyote captured the RR! Roadrunner Rick is now Comcastic! |
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bennor
join:2006-07-22
New Haven, CT
| Prepay is a real catch 22. I know personally some people who use it because they cannot afford to pay COD rate at fill up time for oil. And changing over to other forms of heat like electric may not be viable with CL&P and UI constantly asking the DPUC to raise their rates every year.
I too wonder if this is just the start, if more smaller mom and pop oil companies will go under as the oil prices rise. I also wonder how a company in business for 70 could allow this to happen. If it was simply the rising price of oil or as some of the rep-am posters speculated bad decisions by some in management? I also wonder how this happens even as many large oil companies, like Exxon, continually to report record breaking profits.
But the really unbelievable thing is for a company that has been in business for 70 years to (apparently) not say anything to it's employees until end of day last Friday that they were closing. Something just isn't right there. |
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OIL EXEC
@snet.net
| reply to bennor
OIL EXEC wrote on Mar 12, 2008 9:48 AM:
" FIXED PRICE FUEL FOR FUTURE DELIVERY HAS NO PLACE IN THE MARKET! There is not another utility public/private that offers fixed pricing for future delivery of a consumer utility (propane perhaps) or for that matter any consumable. Think about it? So why should oil company owners think they can beat Wall Street or the pricing mechanisms to be able to secure contracts to provide John Q Public a fixed priced product? Marketing and Greed! Oil companies are trucking companies that deliver a product at hopefully a profitable margin over their cost. PERIOD!
FIXED PRICE FUEL has caused consumers more problems than it is worth, think about it! Any oil company failures of the last years are because of FIXED PRICE FUEL..Oil companies are trucking companies NOT futures trading firms..if they GUESS and I mean GUESS wrong it can be financial ruin in a hurry..and customers loose, employees loose, the state looses for having to spend money to try and pick up the pieces..its' just bad business to try to deliver a product that the price changes daily on a fixed basis in the future..WAKE UP PEOPLE..find a company that is honest, that will deliver to you on a fair margin..(yes you can ask what it is)..if they won't tell you then find another..and stick with them. Oil is not a 30 year mortgage..it is a consumable..therefore it has no place being priced on a fixed basis..to the public...
F&S...is sad..but somebody there thought they could beat the market..the market will always win eventually..appears it did in this case.
FORGET PREPAID OIL...its not in your best interest..OIL is like gasoline..you buy it..you consume it..you buy it again...Do you see any fixed prices at a GAS station for the season? NO and NO. Wake up.. " |
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Grumpy
Premium
join:2001-07-28
99999
clubs:
 ·AT&T Yahoo
| said by OIL EXEC :
" FIXED PRICE FUEL FOR FUTURE DELIVERY HAS NO PLACE IN THE MARKET!
I disagree, and would strongly question this statement as coming from anyone who knows the home heating oil business.
CT oil delivery vendors can reserve quantities in the Summer months, & THEN pay the oil refiners AFTER lifting from the rack in the Winter, with payment typically via EFT within x days AFTER lifting. The quantities to reserve, (by month,) are generally determined by polling and contracting with customers, typically by mid August. If the oil dealer shall not lift the entire reserved amount, an $0.0xx storage fee is levied upon the remainder. No pre-pay by any entity is required in this scenario. When Winter arrives, the home heating oil dealers distribute the reserved gallons to home end users, who are encouraged to pay the heating oil dealer within x days after delivery. This is the basis of fixed price deliveries. The pre-pay portion is another topic entirely, and not to be confused with buying futures.
Perhaps the most valid reason for an end user to reserve gallons is that CT has a very limited oil storage capacity. In the Winter of '99 and into early '00, the state was basically out of oil at the racks, and we were lifting contracts only. Had another week of cold occurred, many would have gone without heat.
If you meant to say, "Pre-pay has no place in the market," I would very strongly agree with you. The chances of getting a refund in the event of a default are slim to none. |
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gregamy
join:2003-05-22
Middletown, CT
| reply to OIL EXEC
said by OIL EXEC :
OIL EXEC wrote on Mar 12, 2008 9:48 AM:
FIXED PRICE FUEL FOR FUTURE DELIVERY HAS NO PLACE IN THE MARKET! Soooo.....don't offer it!
OK, so let's walk through the idea. Company A agrees with "Oil Exec" above and chooses not to offer fixed price oil. Oil Exec A tries to sell the idea to his customers of buying oil on the spot market all year and they refuse, because Company B offers fixed-price "protection" and customers are willing to pay slightly more for that peace of mind. Company A goes out of business because it has no customers and/or its remaining customers - those who buy on spot - can't afford to buy from Company A because *he* didn't do contracts either and *he's* paying spot price.
Looks like the only way Company A can survive is in a declining-prices market. In a rising-prices market, such as today, Company A is toast.
Company B, however, offers its customers "price protection". To cover himself, Oil Exec B gets futures contracts with Oil Wholesaler B. Oil Exec B then calculates his profit margin and uses that margin to leverage the spot market, in the hopes that prices go down, at the same time covering spot customers via the spot market. Worst case, the prices DON'T go down during the year, Company B makes that calculated profit margin plus profits received from spot market sales, and all existing retail contracts are covered via wholesale contracts.
Hmmmm, not sure which way I'd go if I was Oil Exec C...
Hint: oil is a commodity. Oil Exec A, B, and C *better* get a clue on trading futures in commodities; it's their BUSINESS!! If all they want to be is a trucking company, there's a hell of a lot of OTR and local delivery work out there right now that doesn't involve #2 diesel in a big tank and portable hoses in back...
If you're right and the system is not working, and it's causing failures of companies...THEN THE SYSTEM IS WORKING! That's how business works: succeed, adapt, or die. If you don't think this system is how a heating oil company should be run, then you should begin pooling your venture capital to be poised enter the market with a better idea when all these companies fail. It either works, and businesses succeed, or it doesn't and businesses fail, and then someone comes in with a better idea...
To ask otherwise is to fall victim to the Central Planning mindset where someone tries to play the industry like a chess game, using people and businesses as their pawns...you want socialized/regulated home heating oil? Good luck with that... |
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bennor
join:2006-07-22
New Haven, CT
| reply to bennor
Some more interesting news about this...
»www.wtnh.com/Global/story.asp?S=8002596
"A police officer is now guarding the F&S property. The company owes back taxes and the city is taking no chances. Waterbury officials had state marshals secure the oil trucks and personal vehicles of the company."
"The company also did not pay it's taxes and now owes the City of Waterbury more than $40,000."
"A big focus of the state's investigation is a letter allegedly sent to customers several weeks ago asking them to sign up for a pre-paid contract for next year. State officials say oil companies don't usually lock in oil prices until the summer."
"If it turns out that that letter did go out and people pre-paid under fraudulent terms the attorney general says criminal charges could follow." |
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Glenn
I'D Rather Be Skiing
Premium
join:2000-10-05
Wallingford, CT
| said by bennor :Some more interesting news about this... » www.wtnh.com/Global/story.asp?S=8002596"A police officer is now guarding the F&S property. The company owes back taxes and the city is taking no chances. Waterbury officials had state marshals secure the oil trucks and personal vehicles of the company." "The company also did not pay it's taxes and now owes the City of Waterbury more than $40,000." "A big focus of the state's investigation is a letter allegedly sent to customers several weeks ago asking them to sign up for a pre-paid contract for next year. State officials say oil companies don't usually lock in oil prices until the summer." "If it turns out that that letter did go out and people pre-paid under fraudulent terms the attorney general says criminal charges could follow." Gotta love the government! Sure, the government will get their take...but what with the customers get? $50? Even in a situation like this, the government still finds away to get their haul. Unreal.
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Legal ATVing in Connecticut? |
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bennor
join:2006-07-22
New Haven, CT
edit:
March 13th, @11:23AM
| I would think the town/state could cover the tax debt by selling off the tucks. But no matter the case the customer and employee grunts are always screwed in situations like this. Heck customers and employee grunts are screwed in most business situations now days. Somewhere along the way the business people (usually) decided that greed and selfishness takes precedence over the customer, employee, and company welfare. It has yet to be seen if that's what happened here, but I won't be surprised if it did.
The one thing I haven't seen any news stations report yet is if F&S (and the other four oil companies that are now closed) has the bond securing the prepaid contracts or 75% of the oil accountable for these customers in advanced. Either one is required by the state. I thought the bond or 75% thing was supposed to prevent oil companies from going out of business and screwing the pre-paid oil customers. Guess not. |
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bennor
join:2006-07-22
New Haven, CT
| reply to bennor
Some more info...
State Seeks Receivership Of F&S Oil
»www.wfsb.com/money/15596024/deta···psp=news
"About 3,000 customers had prepaid for oil, totaling nearly $3 million."
"DCP has received customer complaints from thousands of people, with losses ranging from $1,000 to $4,000."
F&S Owner Appears Before DCP
»www.wfsb.com/news/15589562/detail.html
"The state said that Stevens only recently became involved with the day-to-day dealings of his business, which has subsidiaries serving people in Waterbury, Cheshire, Meriden and Watertown.
Channel 3 Eyewitness News reporter Len Besthoff reported that Stevens fired the company's CEO, Christopher Carr, last month.
While Carr has been named a person of interest in the investigation, investigators have not yet found him. DCP Commissioner Jerry Farrell told Eyewitness News that the department received information on Thursday that may help in locating Carr.
In spite of the developments, Farrell warned F&S customers to curb any optimism.
F&S employees told Eyewitness News that they are owed at least one paycheck and are now left without health benefits." |
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Dumreb
@cox.net
| reply to bennor
The paperwork showing that the oil has been bought should be in the hands of Consumer Protection.
I was a Supervisor for Weights and Measures until I retired on May 31, 2007. Part of my job was getting this paperwork from companies to prove compliance.
F & S was my most difficult company to deal with. It is no surprise they went under. No decent oil company sells buy-ahead contracts in December for the next year. They were probably just trying to raise cash tor day to day operations.
DCP will help you as much as they can. You can also e-mail me with any questions. I can't say too mush on a public forum.
Don't expect to get any money back unless payment was by credit card. Blumenthal will woof about getting $$ back, but in 4 previous closures, nothing was gotten for consumers. |
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disconnected
@snet.net
| reply to bennor
Last summer, when I tried to order oil again from Archer Fuel out of New Fairfield, I found their number out of service. Small mom & pop company that I liked to support. He always had good prices, too. Sad to see them go. They were nice folks, too.
All of what's going on is related to the fiat empire we have going here. The whole US economy is based on a fraud--paper that the fed can just keep 'legally' counterfeiting. Then you have rising world demand in developing nations, and the fact that the US has reversed the good policies from Washington to Monroe (presidents) of non-intervention abroad, to becoming the biggest meddler in foreign affairs the world has ever seen, and you have some of the pieces to a puzzle called Disaster.
Back in '57, when I read Atlas Shrugged, I thought it was fiction. Today, I realize it was prophecy. |
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