# Price-cap contract

By Nick Bruzzi · Published 2026-07-08 · https://heatprice.com/glossary/price-cap-contract

A price-protection contract that sets a maximum ("ceiling") price per gallon you'll pay, while still letting your price drop if the market softens. To offer it, the dealer hedges with options and charges you a non-refundable fee — a per-gallon premium or a flat enrollment charge.

The catch: you only come out ahead if prices fall far enough to beat that fee; if they stay at the cap, you've paid for insurance you never used.

Source: MA DOER — Heating Oil Contracts Guide; R.I. Gen. Laws § 5-82-1.

## See also

- [pre-buy vs price-cap](https://heatprice.com/guides/prebuy-vs-cap-price-heating-oil-contracts)
- [Ceiling price](https://heatprice.com/glossary/ceiling-price)
- [Pre-buy](https://heatprice.com/glossary/prebuy)

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