Gross to Net Billing

Dear Sprague Customer,

We would like to inform you of a significant change in Sprague's pricing and invoicing of home heating oils including #2 fuel, Heatforce Premium Heating Oil, BioHeat and kerosene. Effective December 1st of this year, Sprague will begin to issue prices and invoice product purchased in net (temperature adjusted) gallons at the following terminal locations:   Searsport, South Portland, Newington, Portsmouth, Everett XOM, Quincy, TRT, New Bedford, Providence, East Hartford, New Haven Magellan, Bridgeport Motiva and Stamford.

We firmly believe that this approach provides our customers with the most transparent means of effectively and accurately comparing the offerings of various fuel suppliers on a consistent basis.  This net temperature adjusted basis is an American Petroleum Institute (API) prescribed methodology used by the industry to standardize petroleum product volumes throughout the supply chain to 60 degrees F., including all the fuel we purchase to fill our own tanks.  Since petroleum products expand with heating and contract with cooling, this is the only fair way to accurately compare prices and volumes across suppliers.

To read the rest of this letter, please click here.

We've prepared a letter that will answer many of the questions this change will bring.  We've also prepared a sheet with an example of what this billing change means.  Finally, we've created a working exercise in which you can enter your pricing data and see how shrinkage can affect the bottom line costs to your fuel purchases.

Gross to Net Q&A
Gross to Net Example
Gross to Net Comparison Exercise*
Net to Gross Calculator

*The exercise requires Microsoft Excel to run.  When you click on the above link, you will be asked to Open or Save the file.  Save the file to your computer and double click to start the exercise.  Further instructions are in the yellow box located in the file.