FAQs about Propane Prices
Q. Why is my propane bill
suddenly so much higher?
A. Consumers across the
nation are asking the same question about their fuel bills. The fact is,
in a free market economy, a variety of supply factors affect the pricing
of all commodities-including propane. And as a by-product of crude oil,
the price of propane usually tracks the cost of a barrel of crude.
Q. How does the price of crude oil affect propane prices?
A. About 55 percent of our domestic production of propane comes from the
crude refinery process: as a by-product of crude oil, the price of
propane usually tracks the cost of a barrel of crude. So, for example,
when the OPEC oil cartel cut crude production in 1999 in an effort to
increase prices, the price of propane also began to rise.
Q. Is propane the only fuel that can experience such a price
increase? Would I be better off switching to fuel oil or electric heat?
A. No. Dropping temperatures across the United States, combined with
other supply and demand factors, have raised the price of all fossil
fuels, including heating oil, gasoline and natural gas. And, on a
national average, propane heating remains a far better value than
electricity: According to year 2000 U.S. Department of Energy
statistics, it could cost more than twice as much to operate your range,
water heater, clothes dryer or furnace with electricity as it does with
Q. Is there anything my propane dealer can do?
A. Yes. We are working hard to protect you from "sticker shock." Keep in
mind that we are as concerned about these price increases as you are.
Although we have to pay higher prices to wholesale suppliers, We value
you as a customer and is very reluctant to pass a wholesale price
increase on to you. As a further hedge against the rising winter prices.
We make sure that all of their routed customers receive a fill during
the summer when prices are at their lowest.
Q. If supply is low and demand is high, do I have to worry about
running out of fuel and not being able to have my tank refilled?
A. No. Overall, there is a sufficient propane supply to meet demand.
Although a sudden blast of winter weather and activity in the
international market will create increased demand for propane, the
industry is moving quickly to meet the demand. There will simply need to
be some shifts in product from areas where supply is high to areas where
supply is low.
Q. Are propane price increases occurring nationwide?
A. Yes, although prices may vary from region to region. Propane is part
of a global market, and its availability and price within the U.S. is
affected directly by events within and outside our borders. A sudden
blast of winter weather in parts of the country will stimulate increased
demand for product. Sudden and sharp increases in demand can result in
price escalations on the wholesale level. Your propane supplier will do
everything he can to offer you the lowest price possible.
Q. Somebody must be profiting from these high prices. Who?
A. Traders or anyone else who had the foresight to secure propane before
the prices started to rise. If they had been wrong in their speculations
and prices had dropped, these same people would have lost money.
Q. Shouldn't the government step in a regulate fuel prices when they
get out of hand?
A. The government tried price controls during the 1970s oil crisis, and
they were proven to be ineffective. The government does offer assistance
for low-income families through a Low Income Home Energy Assistance
Program (LIHEAP). For information on this program or to apply for
assistance, consumers can check with their local community action agency
or state LIHEAP coordinator. More information, including the names of
state directors, may be obtained by calling LIHEAP's general number:
(202) 401-9351, website:
FAQs about Propane
Q. Is propane safe to use in my home?
A. Propane is a safe fuel to
use in your home and business. Propane has a narrow range of
flammability and cannot be ingested like gasoline or alcohol fuels
because it is released as a vapor from a pressured container. In
addition, award-winning preventive maintenance programs like GAS Check
(Gas Appliance System Check) ensure that homeowners understand how to
properly maintain their propane appliances and enjoy a healthy, safe
Q. Is propane dangerous to the environment?
A. No. Propane is an approved, alternative clean fuel listed in the 1990
Clean Air Act and the National Energy Policy Act of 1992. Propane is one
of the cleanest burning of all alternative fuels; new propane-fueled
vehicles can meet the very tough Ultra-Low Emission Vehicle (ULEV)
standards, and one model even meets the Super Ultra-Low Emission Vehicle
(SULEV) standards. Propane is also nontoxic, so it's not harmful to soil
Q. How can I be sure I'm handling the use of propane properly in my
A. NPGA has developed a comprehensive maintenance program called GAS
Check (Gas Appliance System Check), in which trained technicians inspect
propane systems and appliances in homes to ensure they are running
safely and efficiently. The program also educates homeowners on the
proper maintenance of propane appliances and how to handle propane
Q. Is propane really a convenient fuel?
A. Yes. Propane is stored in portable tanks, so it can be used in areas
beyond the natural gas mains. When used in vehicles, propane is also
easily replenished and refuels at 10 gallons to 12 gallons per minute,
similar to gasoline. More than 10,000 propane refueling sites are
available across the country.
Q. Who uses propane?
A. Propane is a trusted and reliable energy source that is used by
millions of Americans each day. It fulfills energy needs by burning
cleanly and efficiently, giving consumers more value for their energy
dollar. People use propane in or outside their homes for furnaces, water
heaters, air conditioners, outdoor grills and appliances; on farms; for
industrial uses such as forklifts and fleet vehicles; and in millions of
commercial establishments, including restaurants and hotels that depend
on propane for heating, cooking and other uses.