The Price of Propane Depends on Many Factors

 

The price of propane is complex, fluctuating alongside other commodities and with seasonal demand. The price of propane depends on many factors, including demand, weather, individual propane usage, geography, exports, transportation costs, and more.

Propane prices are generally cheaper during the summer months as demand is low and wholesale prices are lower May through September.  

Commonly asked questions regarding pricing.

Do all propane suppliers charge the same price?

No. Since propane prices are not regulated by the government, each propane company is responsible for setting their own propane pricing. Propane price ranges can vary significantly by geography, season, and supplier. Propane prices can also vary if the propane tank is leased from the supplier or owned by the customer.

How will leasing vs. buying a propane tank impact my price?

Homeowners that use propane have the option of leasing a propane tank or purchasing a propane tank. If a customer leases a propane tank, that customer must purchase their propane from the supplier providing the leased tank. With a leased tank, the propane pricing schedule is controlled by the propane supplier that provides the leased tank.

If a customer purchases a propane tank, that customer has the option of calling any propane supplier in the area that services customer-owned tanks and order a fill at the best price. Since the customer that owns their tank can call any supplier for a delivery, the propane price quotes are generally lower. Please note, that for a propane supplier to deliver to a customer owned tank, the tank owner must have proof of ownership and a gas check must be done on the system before any propane can be delivered.

It is important to consider the responsible party for any future tank repairs. Suppliers are typically responsible for any tank repairs to their leased tanks, while customers are typically responsible for any repairs made to a tank that they own.

Should I pre-buy my propane supply for the upcoming winter?

Pre-buy is typically a money saving program for propane consumers. It is impossible to predict the future of propane pricing with certainty. Therefore, it makes sense to contact your supplier and inquire about their pre-buy offer each summer. The pricing is based on the wholesale price of propane.

Are new customer offers by propane suppliers a good idea?

These offers are very common among propane suppliers. New customer offers can provide some initial cost savings. However, when viewing a supplier’s propane pricing, it is very important to distinguish between a supplier’s short-term introductory pricing and a supplier’s everyday standard pricing offered to all customers. A typical new customer offer can include a short-term introductory rate designed to attract customers. To make an apples-to-apples comparison of propane suppliers pricing, make sure you fully understand the price difference between new customer offers and your suppliers regular pricing. The truly relevant information is the suppliers’ regular everyday pricing.

Do all propane suppliers charge customers extra fees?

No. Not all suppliers charge these fees. Propane companies have operational expenses just like any other business. Some propane companies charge their customers propane delivery fees, safety hazmat fees, administrative fees, pre-buy and payment participation fees, invoice fees, fuel surcharge fees, etc. When these fees are included in your bill, they can drastically increase your propane expenses with a propane supplier. If applicable, ask your supplier to explain these fees in detail. It is very important to understand all these extra propane supplier fees and what triggers the charges.

Does my annual propane usage affect my pricing?

Yes. Your annual usage greatly affects your propane pricing. The lowest pricing available is if you own your own tank. The next lowest pricing is if you use propane for primary heating and use over 700 gallons per year. Some companies have lower pricing for those who use even more than that, and the published Maine State pricing is for over 900 gallons annually. The highest pricing is for those that use less than 100 gallons annually or only have a standby generator. The higher pricing is due to the investment in tanks and equipment at your home and the maintenance of that equipment.

How come I am paying more than published on the Maine State Website?

The Maine State Propane Pricing is based on usage over 900 gallons annually and is also broken down by where you live in Maine. The pricing is generally highest in the Southeast/Greater Portland area. You can find this information here https://www.maine.gov/energy/heating-fuel-prices.

Why am I being assessed with a Tank Usage Fees?

Tank usage fees, also known as Low Usage or Minimum Usage Fees are applied to customers who do not use enough propane annually to offset the equipment and maintenance costs at their home. An example of this would be a generator only account. Generators use very little propane annually unless there are outages. A home that only uses propane for cooking is also considered a low usage account, along with seasonal homes.

filed under: General, Service