Like an oil derrick, the Auburn City Council tapped a gusher by proposing to let residents join the city’s heating oil contract: the overflowing consumer frustration at being unable to negotiate better fuel prices.
Lone consumers can neither make oil dealers compete nor offer attractive incentives for their individual business. As prices for this precious commodity rose over the winter, all consumers could do was bear the cost.
And grumble – loudly – at their lack of leverage.
The city council has responded with this invitation, which seems logical. Municipalities and schools, like many large consumers, can contract more competitive fuel prices because of their budgeting and sizable consumption needs.
So, from their perspective, what’s a few more tanks to fill around town?
Oil dealers deride this notion as straight from the Communist Manifesto, but even they cannot discount the deep groundswell from which it sprang. The unprecedented increase in fuel costs is causing consumer fear and uncertainty.
Almost on cue, government is trying to react. Some ideas are bad – like a federal gasoline tax holiday. Some ideas are good but not enough, like stopping regular deposits into the national strategic petroleum reserve.
Others are good, but might be difficult to develop. This is Auburn’s. As the city pursues this plan, its foremost mission should be driving the hardest possible bargain for its fuel. This benefits taxpayers, too.
But, while waiting to perhaps join the city, consumers should also consider organizing themselves.
Public-private oil purchasing partnerships, like Auburn’s, are unprecedented, but consumer cooperatives are not, so a cooperative should be easier to create. By banding together, consumers would be equally equipped to succeed in the interminable search for negotiating leverage, as they would be tied to the city.
This does work elsewhere.
In Massachusetts, for example, the Massachusetts Energy Consumer Alliance is a 26-year-old nonprofit consumer cooperative that offers discounted heating oil to its 7,000 members. Its Web site boasts savings of between 10 and 30 cents per-gallon from retail costs.
Membership costs are nominal – $20 annually, or $45 for three years – but member savings on oil claimed by the cooperative are upward of $175 annually. This is the kind of results consumers are thirsting for, and what the city of Auburn is trying to provide with its buying plan.
Auburn’s idea is good, but there are logistical obstacles: contract terms, service, not to mention reticent vendors
But there is nothing stopping consumer collaboration to pursue the same end: lower fuel oil prices.
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