FUELS
BY STEPHEN BENNETT
The Ins and Outs
of Dual-Fuel Marketing
Fuel oil dealers venturing into the propane business have to figure out
how to market two very different fuels
The Dr. Energy Saver team: (L-R) Michael Geldart, production manager; Tim Edgar, production team member; Greg Hede, energy consultant.
18 NOVEMBER 2015 | FUEL OIL NEWS | www.fueloilnews.com
S
hane Sweet once worked for a heating oil company in
southwestern Vermont that acquired a propane busi-
ness. It was the mid 1980s and building was booming.
"For the first two years we didn't run an ad in the
paper," said Sweet, now the executive director of the New
York Propane Gas Association. That was because they didn't
need to. "All we did was put stuffers in our statements,"
Sweet recalls. "We had all the business we could handle in
our customer base."
That approach is not one that can be taken by every fuel
oil dealer who also has propane business, Sweet said. "I've
heard marketers say you can't build a [propane] business that
way"—on the backs of existing heating oil customers—"and
I agree," Sweet said.
Still, multi-fuel companies that acquire a heating oil
dealer are often seen converting it to propane, "which makes
sense," Sweet said. "There's a better chance of holding onto
[an] account if you're selling them propane—certainly over
the past couple of years when [heating oil] was four and five
bucks a gallon and the cost per million Btus was an issue."
Though that's no longer quite the case—the price of heat-
ing oil has decreased because of a boom in domestic oil and
gas production—marketing both oil and propane should
be undertaken with short- and long-range plans that take
into account the availability of natural gas in the area—now
and eventually—as well as economic factors that influence
consumers' behavior, and the image of a company selling
both fuels. Multi-fuel companies may not always identify
themselves as such, Sweet points out. "Some companies have
a separate [unit] just for the propane business," Sweet said,
"and you might not even be able to tell that it's the same
mother ship." It's common to see "ABC Fuel Company"
buy a propane company and become "ABC Energy," Sweet
noted. "That's the way most retailers are handling it right
now," he said. "Customers like one-stop shopping."
The propane market in the Northeast—New England and
