The company competes with gas and electric utilities and other fuel oil distributors in its market areas. Drum arranges service contracts with its retail customers. The service contract itself is not profitable, but it is used to promote fuel oil sales to these customers, for which they are billed at tine of delivery. Oil is delivered by its fleet of 283 trucks. Other services are furnished through a fleet of 259 service trucks and 141 other vehicles.
Trucks generally pick up their loads at various port terminal facilities.
Excess oil is pumped from these facilities through common carrier pipelines and via company trucks to storage facilities. The company, in December 1981, purchased an underground oil distribution system from another oil company. After 11 months of operation, there was a distribution system failure which released 5000 gallons of oil into an underground aquifer. The EIL insurer accepted the liability and agreed to adjust the loss. Four months later, in March 1983, a settlement was proposed.