Why Are Propane Prices Higher This Season?

Written By: on December 6, 2021

Understanding Market Activity That Affects Your Propane Costs

propane price up arizonaIt’s been a rough couple of months here recently when it comes to measuring the cost of living. Commonplace items such as groceries, gasoline, clothes, and more have all been more expensive than in years past.

That may have you worried about how much you’ll be paying for your propane this winter. We understand that. Superior Propane, Inc. will always provide our customers competitive pricing with reliable delivery.

What’s important to know is that higher propane prices have a negative impact on our business as well, as customers often reduce their propane usage to combat the rising prices. We need to tap further into our lines of credit. Our phones ring frequently as people have questions and concerns. Simply put, the sooner propane prices drop, the happier we’ll all be.

Because we are a fourth-generation family business, we have solid, long-term relationships with our suppliers. We have ample storage facilities. That gives us stability in our propane supply, so we are less vulnerable to these market swings.

Propane Prices and the Marketplace

Even in normal times, the price of propane can vary a great deal over the course of a year and can change quickly. The price of propane itself is determined by a variety of factors—which is not as simple as you might think.

Propane is made from commodities that are bought and sold on the international market. Natural gas accounts for about 70%, followed by crude oil. As a result, propane prices might vary significantly based on unpredictable circumstances.

Some of the factors that influence propane prices include:

Supply and Demand. A commodity’s price may vary considerably based on demand. Prices will rise if winter is harsh and lengthy. The propane supply could be affected by the surge in propane exports to meet worldwide demand. Propane prices are determined by several factors, including demand and production levels, as well as the time of year. That’s why the “shoulder seasons”—the late spring and early summer months—are often an ideal time to have us fill your propane tank.

Weather. Extreme cold temperatures and inclement conditions can also impact propane creation, resulting in a scarcity of propane that drives up prices.

Proximity of Supply. The cost of propane will nearly always be lower the closer you live to a major distribution center.

Current Events. Propane prices are influenced by many external factors, such as oil spills, pipeline disruptions, ransomware hacking, geopolitical conflicts or instability, and the COVID-19 epidemic, which has severely disrupted the supply chain for several sectors in the United States.

Market Need. Customers will pay more for propane in the winter when they need it most for home heating. Propane is used in commercial applications throughout the year, peaking during the summer months when propane-powered cars and equipment are employed more frequently.

Superior Propane Inc. offers several payment and pricing options to help you better manage your propane costs. Get familiar with all our available options here. Please don’t hesitate to reach out to us with any questions—we’ll be here to help you in any way that we can this season, and well beyond.