What Affects Current Propane Prices

Posted by ThompsonGas on February 7th, 2015

Propane is a versatile source of energy. Millions of Americans rely on it every day for various purposes including indoor heating, water heating, refrigeration, barbecue grills, and drying their clothes. Propane is a byproduct of natural gas and crude oil production, and people who use it are often surprised with the prices when they compare the residential price to the average price. Here are the factors that affect current propane prices:

  1. Fees and Services from a Provider

    The prices of propane may vary from one retailer to another. A price may exclude or include the services that the company offers, too. Factors like automatic delivery, budget payment plan, and fixed prices are some of the services that may affect the prices of propane. Some of these may help you save money if you intend to use propane in the long run. Consider asking your propane service provider their charge per gallon for the delivery. Compare the price with national or state averages to make sure that it is reasonable.

    There are other service factors that may affect propane prices:

    * Tank rental fees – Applicable if you are leasing the propane tank from a service provider or supplier
    * Regulatory fees – This should comply with state, local, and federal regulations on handling, delivery, and transport of propane
    * System leak test fees – This covers the labor costs for the leak test
    * Restocking fee – For emptying the tank
    * Closeout fees – For when you close an account with your service provider
    * Installation fee – Labor costs when the propane system is installed in your home
    * Special delivery or emergency fees – When propane is delivered after business hours
    * Early termination fee – When you end a contract with the service provider before its designated date

  2. Region and Climate

    There are other factors that can affect current propane prices, and a climate variation is one of them. Propane tends to have a higher price when it is cold or in winter because of the higher demand for the fuel. Prices are likely to rise until the service provider can fulfill the high demand.

    Transportation costs may be factored into the price of propane. The further you live from two supply sources, the more expensive the propane will be.

  3. Crude Oil

    Propane is a byproduct of this fuel's production, so it makes sense that crude oil market prices can affect the price of propane.

About the Author:

This article was written by ThompsonGas. The 16th largest retail propane company in the U.S., ThompsonGas has been family owned and operated since 1946. The propane gas dealer provides cheap propane for residential and commercial propane gas service to customers across 10 states in the East and Southeast.

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Joined: February 12th, 2013
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