Propane prices have risen to record highs, Greg Noll, executive vice president of Propane Marketers Association of Kansas, said.
Prices jumped from around $1 per gallon in mid-January to more than $5 last week for marketers, and rose even more for local companies like Cardie Oil and S&S Propane and consumers, Noll said.
While prices for some customers are going up, Trayce Warner of Florence won’t see much of the price increase immediately because she contracted propane for a year at a lower price during the summer.
Where customers who did not contract could see their propane bill increase to around $500 a month for 100 gallons, Warner won’t have to pay more than $140 a month because of her contract.
She and her husband have been contracting for six to seven years because paying the same each month made it easier to budget. Now that prices are so high, she is glad they contracted for more than just that reason, as they are saving anywhere from $350 to $450 this month alone.
“We are very lucky to have a contract,” she said. “I know what to plan on every month, and don’t necessarily have to worry about price fluctuations, although we haven’t heard from them yet about any changes because of this latest jump. Luckily also is the fact that our tank is mostly full right now, so maybe the price will go down before we need more fuel.”
The increase comes from a severely depleted propane supply across the county caused by high U.S. exports of propane and a wet fall.
“Grain elevators in other states, not just Kansas, have had to use more propane than usual this fall to dry crops,” Noll said.
Couple that with an arctic blast that sent temperatures into record lows in much of the country, and the demand for propane skyrocketed.
“Demand is still up because it’s winter, and when it’s cold everyone turns up the thermostat,” Noll said.
Noll said he does not know if the hike is a short or long-term affair.
“We hope it’s short,” he said, “but if something in the supply changes, even today, the recovery time could be weeks, extending the price hike out weeks.”
Because weather plays such a large factor in propane supply and demand, he said warmer temperatures over the weekend would help some, however the long-term forecast shows extended cold periods, and he believes they will not help much.
Craig Settle, president of Cardie Oil, believes the hike to be short term, maybe a few weeks, and prices to normalize once supply and demand normalize.
“We’ve never been in a situation like this,” he said, “so we’re trying to figure out what’s best by our customers.”
The company will honor all existing customer contracts, such as Warner’s, Settle said. Cardie is advising customers not on contract to not fill their tanks unless necessary, in hope prices fall before they need propane delivered again.
“We’re advising people without contracts that if they absolutely need propane to do a smaller delivery,” he said. “That way they can absorb the cost better and do what’s best for them.”
Some customers have been less than pleased about the increase, Settle said.
“It’s shocking,” Settle said, “but most customers understand we aren’t behind the price hike and the market controls these things.”
While the shortage could leave some across the country without propane, Noll said, Settle does not believe that is the case in Kansas.
“I’m not worried because we have enough in our tank to be OK, and around Kansas people are very supplied,” he said. “We won’t let anyone run out.”
Noll is advising the best thing people can do right now is to conserve.
“Turn the thermostat down to almost unbearable temperatures, shut off rooms that you don’t need to heat, don’t heat barns or out-buildings unless absolutely necessary,” he said.
In order to avoid shortages like this in the future, Noll said customers should replace appliances with high-efficiency appliances.
“People need to be aware about how much they consume and do their part to do what they can to conserve,” he said. “That way there is more propane to go around.”