We all know that propane prices have their ups and downs. This is all normal and influenced by many factors, including supply and demand, the weather, geopolitics and Wall Street investors, to name a few.
Unfortunately, we’re in a temporary “up” cycle now.
Propane prices have been increasing since summer because of high international demand and lower global propane supply. In the U.S., propane inventories were projected to be at their lowest level to start the heating season since 2013, according to U.S. Energy Information Administration. The heating season began on October 1.
Recently, wholesale propane prices hit their highest weekly average levels since February 2014. But that’s only part of the story. All energy sources have been going up, from heating oil to natural gas to electricity. And you’ve already seen the price of gasoline every time you fill up your car with gas.
Besides rising energy prices, we’re also seeing price increases in many other products. A big problem has been the COVID-19 pandemic, which has caused enormous supply-chain challenges. This is limiting supply even as the demand for goods keeps rising.
People sometimes misunderstand how negatively higher prices can impact local fuel dealers. They don’t make more money when prices rise like this—they actually make less.
Think of it this way: it’s like when the cost of coffee, milk or orange juice rises. It’s not the local grocery store that is profiting. (That’s left to the Wall Street investors).
Propane customers have a harder time paying their bills. They reduce expenditures. Propane suppliers may need to tap into their lines of credit more. Phones light up with questions from propane customers. So the sooner energy prices drop, the happier your propane company will be.
In the meantime, please reach out your propane supplier about ways they may be able to help you reduce your energy costs, or handle payments more easily. And if you are worried about keeping up with your propane costs, please pick up the phone and call them. They can generally work with you if you reach out before you fall behind.
In our last post, we encouraged you to arrange for a delivery in early fall so you can start the heating season with a full propane tank. If you take advantage of programs such as early fill-ups, automatic deliveries and prebuy, obtaining propane whenever you need it is fairly easy. But for propane suppliers, planning can be more complex and that process often begins long before deliveries even reach customers.
Predicting the volume of fuel that each customer needs represents a key component in a refined supply plan that includes storing away a sufficient amount of fuel. Propane customers can help in this process by contacting their dealer before the winter heating season arrives to plan for their anticipated propane needs during the coldest months.
Throughout the year, your propane dealer is committed to supplying you with reliable propane deliveries. If you have any questions or need to discuss your propane supply, please get in touch with your local propane dealer.
Keep in mind that almost all the propane used in the U.S. is produced domestically, meaning every gallon you buy contributes to the independence of America’s energy needs. Having a propane tank on your property gives you the ability to store a sufficient supply that’s always ready for immediate use, eliminating any dependence on an underground gas pipeline—just one more reason to feel good about using propane.
Read more about propane here.
