Oil tank readings for a closing
When a house with oil heat sells, the oil left in the tank is the seller's property, and the buyer pays for it at the closing table as a fuel adjustment. The number on that line comes from a tank reading, usually done by the oil company a few days before closing. Here is how the measurement works, what the paperwork says, and how to check the math yourself.
How the reading is done
- The seller's side orders it. Typically the seller or their attorney asks the current oil company for a reading a few days before the closing date. Expect a modest service fee; policies vary by company.
- The tank is sticked. A tech dips the tank exactly as described in how to stick an oil tank, including buried tanks through the fill pipe. Float gauges are not used for closings; they are too coarse to price.
- Inches become gallons with a chart. The same conversion charts on this site: a 275 vertical at 22 inches is 137 gallons; a 550 underground at 24 inches is 282.
- Gallons get priced. Normally at the company's posted retail price on the day of the reading, unless the contract of sale says otherwise. The attorneys' contract language controls.
- The company issues the letter. A short statement on letterhead, often called a closing ticket or tank reading letter: date, tank size, inches measured, gallons, price per gallon, and the extended total. It goes to the attorneys and shows up as a seller credit on the closing statement.
Some companies use the fill-up method instead: top the tank off right before closing and price a full tank. The meter on the truck makes that number exact, and the buyer starts with a full tank, which everyone tends to like.
Check the math yourself
Sellers can estimate the credit before ordering the official reading, and buyers can sanity-check the letter: stick the tank, convert with the chart for the tank size, and multiply by a current price. A half-full 275 is about 137 gallons; at, say, $3.50 a gallon that is roughly a $480 line item. Real money, worth the ten minutes.
If you are the buyer
- Confirm the tank comes with the house and who owns it. Nearly all residential tanks are owned outright, but confirm there is no supplier equipment agreement attached to it.
- Note the tank's size, age, and location now. The closing letter tells you the size; the identification guide covers the rest. Your insurer will ask, especially about buried tanks.
- Buried tanks deserve their own diligence. Testing, insurance riders, or abandonment negotiations are their own process during contract, separate from the oil credit, and worth handling before closing rather than after.
- You are not married to the seller's oil company. The reading creates no obligation; choose any supplier after the keys change hands.
Common questions
Who pays for the tank reading?
Usually the seller, since the credit is in the seller's favor. Fees are modest and some companies waive them for their own regular customers. The contract of sale can assign the cost either way.
What price applies to the gallons?
Standard practice is the oil company's posted retail price on the day of the reading, but the contract of sale governs. Some riders specify an average price or the seller's last delivery price; the attorneys settle that, not the oil company.
The tank is buried. Can it still be read?
Yes, buried tanks are sticked through the fill pipe like any other; the buried-tank procedure is routine for delivery companies. Where geometry makes a clean stick impossible, the fill-up method prices the oil exactly instead.
How close to closing should the reading happen?
A few days at most, and the letter is dated for that reason. Heat running between the reading and the closing burns seller-credited oil, so in winter the tighter the window the fairer the number for the buyer.