Written on: October 19, 2021
Once again, we’re seeing propane and other energy prices surge across the board. Your local propane company knows how painful that can be for their customers. But it’s painful for your propane supplier as well.
Propane prices have been increasing since summer because of high international demand and lower global propane supply. In the U.S., propane inventories were projected to be at their lowest level to start the heating season since 2013, according to U.S. Energy Information Administration. Recently, wholesale propane prices hit their highest weekly average levels since February 2014. But that’s only part of the story.
Gasoline has risen more than a dollar more per gallon vs. a year ago. Natural gas prices have skyrocketed more than 150%. Crude oil prices have climbed above $80 per barrel, a level we haven’t seen in seven years.
The cost of electricity has not been spared either. Higher natural gas prices result in price hikes for wholesale electricity because of heavy reliance on natural gas-fired power plants.
Besides rising energy prices, we’re also seeing price increases in many other products. A big problem has been the COVID-19 pandemic, which has caused enormous supply-chain challenges. This is limiting supply even as the demand for goods keeps rising.
People sometimes misunderstand how negatively all this impacts local fuel dealers. They don’t make more money when prices rise like this—they make less.
Think of it this way: it’s like when the cost of coffee, milk or orange juice rises. It’s not the local grocery store that is profiting. (That’s left to the Wall Street investors). Propane customers have a harder time paying their bills. They reduce expenditures. Propane suppliers may need to tap into their lines of credit more. Phones light up with questions from propane customers. So the sooner energy prices drop, the happier your propane company will be.
In the meantime, please reach out your propane supplier about ways they may be able to help you reduce your energy costs, or handle payments more easily. And if you are worried about keeping up with your propane costs, please pick up the phone and call them. They can generally work with you if you reach out before you fall behind.
Rest assured, your propane supplier will do everything possible to ensure they can deliver——no matter the cost or difficulty they face.
Your propane company appreciates your understanding during this difficult time.