Our valued customers in Delmarva and eastern Pennsylvania have been calling us recently wanting to know a little more about the how—and why—regarding the price of propane. We understand their concerns. With disrupted oil markets, price speculation, and the highest inflation in 40 years, all energy prices have surged including gasoline, natural gas, and electricity.
Propane has seen fluctuations, too, but not as much as other fuels. Here’s a primer on the cost of propane per gallon and what factors affect it both now, and during the winter season.
While propane can cost between $3 and $5 per gallon throughout the U.S., it’s currently closer to the $3-$3.50 range in our area. Like all fuels, propane’s price changes daily. Even so, propane’s price is more stable than a lot of other energy sources right now. We hope that will continue and will continue to monitor its market rate.
One of the main reasons that the price of propane is less volatile than oil or natural gas is that it’s a domestically-made fuel. Pretty much all the propane your home receives comes from within the continental U.S.
Even so, propane’s price is still somewhat affected by crude oil and natural gas prices. That’s because propane is a coproduct of those two fuels. Roughly 70 percent of our propane comes from the extraction of natural gas. Still, oil prices are the better indicator of how propane’s rate will change because oil and propane are closer competitors in the market.
While the Poore’s team is proud to offer fast, safe, and reliable propane delivery to our customers in the Eastern U.S., the fuel we deliver often has a long way to travel from its source.
The U.S.’s largest storage facilities for propane are in Kansas and Texas, which leads to high transportation costs. All of this gets worse in the winter as demand rises and roads get icy.
Demand impacts the price of propane. For example, when people need to heat their homes in winter, they purchase more propane, which then drives up prices. Similarly, heavy rains during agricultural growing seasons increase the farm demand for crop drying, also causing prices to rise.
Internationally, there may be another strain on U.S. propane supplies in the coming months. There may be additional exporting of American propane overseas to compensate for Russian fuel that the E.U. is currently cutting off.
We understand that economic conditions have been stressful this year, and you might be concerned about propane prices in the coming months. If you’re a Poore’s Propane & Oil customer, you can feel confident that we’re working with our suppliers to keep you comfortable this winter.
If you have any questions about your propane costs, don’t hesitate to contact our team. We’re always here to help.