PHILADELPHIA -- Turning on the heat is probably the last thing on your mind.

It's something Bob Schwind and his wife are thinking of because they've received an offer from their oil company for this upcoming heating season.

"We went into shock," Bob Schwind said.

Their prepay price of $1.94 per gallon last year will jump to $2.54 per gallon this winter.

"When you crunch the numbers, you're looking at $2,500," Schwind said.

That's $600 more than last year.

It's a significant increase to heat their home, but the prepay price is paid in total up front and set so it doesn't matter what prices do in the future.

Most companies offer options.

"A lock-in price is just that. You are committing to work with that dealer for the entirety of the season at a fixed rate," said Erin Malony, with the Energy Cooperative.

Malony said lock-ins are a gamble, but oil prices have not gone down over the past few years.

Heating Oil Prices
Jan. 2002 $.825
Jan. 2003 $1.29
Jan. 2004 $1.36
Jan. 2005 $1.73
Jan. 2006 $2.22
Currently $2.37

The energy co-op, because it has so many members, is able to negotiate better prices from their dealers, so consumers get a break. Still, it's going to be an expensive winter.

"We're definitely recommending that folks get on a budget plan or at least look at what's available," Malony said

The Schwinds will also be replacing their 35-year-old heater. That could cost around $4,000, but they'll be saving because the new one will be more efficient and they'll save on oil.

"You know, I'm looking to save 50 percent. It would be nice if we could, but I would be happy with 20 to 30 percent. It would be great," Schwind said.

Lock-in rates and prepay rates will be higher than the current rate because rates are usually lower in the summer when demand is down.

Lock-in rates offered right now are between $2.60 and $2.70 per gallon.

Related Links:

Energy Cooperative

Heating System Calculator