We are aware of the recent volatility in propane prices that were experienced in the past few winters. While we do not believe that every winter will have huge price increases, we are concerned about the problems these high prices cause for our customers.

In order to serve you and your propane needs, we once again are offering a program that will "guarantee" the price you pay for propane in a given winter. With the help of market experts and others that are knowledgeable in the propane markets, we have found a plan that we believe will provide you with price protection. The plan is based on the futures markets and commodity trading which are complicated and complex, so we have tried to simplify the explanation.

The MOORE PIP

The Moore PIP stands for Price "Insurance" Program. Here is how it works. You can lock in a maximum price for your propane for the entire winter, Participation in the Moore PIP allows you to put a "cap" (or limit) on the maximum price you pay for any delivery of propane for the entire winter while allowing you to enjoy the savings and pay a lower price if the price decreases during the protection period. Until you sign up, the maximum price can change from day to day based on the current price of propane.

The cost of the Moore PIP is 10¢ per gallon, based on the propane usage expected for the upcoming winter (October 1 through March 31), subject to a minimum $15.00. The 10¢ "premium" does not count towards the cost of your propane, but acts much like an insurance policy that pays off if the price of propane increases significantly. You are billed for your propane when it is delivered and can still take your 5¢ per gallon discount if you pay in 10 days.

For example, the PIP price cap in August 15, 2003 is $1.3779. Customer A expects to use 837 gallons this winter, For only $83.70 [837 gallons x 10¢], Customer A can guarantee that the price he/she pays for propane this winter will not be more than $1.379 per gallon. If the price is less than $1.379 per gallon, then Customer A will pay the lower price. If the price stays at or below $1.379 for the entire winter then Customer A will not benefit from the $83.70 paid for the price cap but will have paid less than $1.379 per gallon. If, during the winter the price goes up to $1.999 per gallon, Customer A will pay only $1.379, saving 62¢ for every gallon.

Remember, the 10¢ per gallon PIP payment is like an insurance premium. If you don't need the price protection then it is used up. There will be no additional charges or refunds based on actual gallons. Also, the 10¢ per gallon PIP payment does not count towards the purchase price of any propane purchased during the winter.

We hope you will give the Moore PIP serious consideration. The program is subject to close at any time (due to war, terrorist actions, etc.) but under normal circumstances we expect the program to remain open to all customers through September 30, 2006. The only requirements is that your account balance with us is current. If you need more information, please give us a call at the office and one of us will try to answer your questions.

To participate, just call Mary Lewis at (252) 975-3873, Extension 231 and ask for current PIP price and an estimate of gallons to determine the cost of your Moore PIP premium. Write a check and when we receive your check you have price insurance for the entire winter.

F. RAY MOORE OIL COMPANY , INC.

NOTE:      This program is subject to close at any time (due to war, terrorist actions, etc.), but under normal circumstances the program will end on September 30, 2004. We cannot accept requests for program participation after that date. Prices can change daily during the offering period.