High propane demand affects costs for product
Wil Petty firstname.lastname@example.org
Increased demand for propane nationwide and a shortage of propane is driving the costs of the product up in the region.
Area propane suppliers have an adequate supply for now, but the demand nationwide will continue to drive up prices, said local suppliers.
“We have been lucky enough to have sufficient supply contracts,” said Kelly Douglas, vice president of Elkin-based G&B energy, which includes Ashe County in its service area. “Supplies for us have been ample enough.”
With the colder weather taking place across the nation, allotments of propane have been transferred from southern states to the northeastern and midwestern states.
“(The shortages and costs) probably won’t go back to normal until it warms back up in the springtime,” said John R. Jessup, executive director of the N.C. Propane Gas Association (NCGPA), an organization made to promote, protect and encourage propane gas use in the state.
Jessup said while this winter has been cold here, it has been warmer in Europe and other areas where propane is exported. Some of the exported product is making its way back to the U.S.
Blue Ridge Energies, another propane provider has been monitoring the situation and dealing with it the best they can.
“Blue Ridge Energies is closely monitoring prices and supply to maintain our customer service standards and to meet the needs of our customers,” said Renee Whitener, director of public relations for Blue Ridge Electric, the parent company of Blue Ridge Energies. “Propane wholesale prices have dramatically escalated for all suppliers in the last few weeks.”
The shortage has been a problem statewide, but each individual company in the state is facing it different ways.
“It’s hard to paint the whole state with one brush,” Jessup said. “Every propane market has different issues.”
While costs have gone up, some companies are trying to limit the affect on its customers. Douglas said costs for G&B have increased by as much as $1.50 per gallon of propane. Of that increased cost, 70 percent of it has been passed on to the retail price.
“Costs have drastically gone up in the last two weeks,” he said.
Jessup said it is hard to say what the average price is, but it was in the “$3 a gallon” range.
For NCPGA, they are looking for potential solutions for future years to prevent the shortages. That includes national legislation to limit exporting and encouraging dealers to have extra storage and a plan going into the winter months.
“(Propane) is not just a commodity for us,” Jessup said. “It heats people’s homes, cooks people’s food and provides hot showers. For us, it’s personal.”
For the providers, they are weathering the cold months and are waiting for the warmer temperatures.
“I think the milder temperatures will ease the demand side,” Douglas said.
Blue Ridge Energies is also working with its customers to help however they can.
“As we come out of the heating season, we hope to see prices decrease as demand decreases,” Whitener said. “We are working with our customers if there are issues with payment and we have several options for making payments more manageable, including a senior citizens discount and budget billing.”
Wil Petty can be reached at (336) 846-7164 or on Twitter @WilPetty
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