Propane Gas Prices Per Gallon

Propane Gas Prices Per Gallon

In the United States the government does not play a strong hand in propane price regulation. Instead the private market establishes propane price levels. While this pricing mechanism is has its benefits, it also creates the need for consumers to conduct research in order to find the best current supplier or risk overpaying. For example, suppose a consumer is purchasing 10,000 gallons of propane per year. If their supplier is charging $.25 more per gallon than a nearby competitor, this consumer is unnecessarily spending $2500 per annum. To order to get the best available market price consumers have to do their homework and stay updated on the prices being offered by the suppliers in their area.
Generally suppliers do not post their prices so consumers must actively inquire what their prices are. As a consumer you should always have an arrangement with your propane supplier whereby you are informed of the price per gallon before any delivery. If your supplier does not post their prices, you can have them inform you of the price 1-2 days before the delivery by phone, fax, or email. It is important to have this advance notification because it allows you as a consumer to shop around and make sure the price you are paying is competitive. Because many consumers have automatic delivery of their propane supplies, it is important to have at least one days notice of the price in order to have enough time to check with other dealers.

FACTORS THAT AFFECT PROPANE PRICE PER GALLON

There are many factors that affect the price of propane in the market. The principal factor is the price of crude oil. However once the price of propane is set at the wholesale level, there are still other elements to consider before arriving at the price paid by the end user. These include tank ownership and price protection programs.

Tank Ownership
Self-Ownership: If a consumer owns their own propane tank, they have the option to shop as many suppliers as they like in search of the best price. If you are able to purchase your own tank you can save significantly on your costs. Suppliers must compete for this business and the bidding process leads to better prices for the customer. Owning your tank gives you a greater degree of control over your supply and cost of propane.

Leased Tank: Another option for consumers is to lease their propane tank. In this case the consumer is usually obligated to purchase their propane from the supplier that is providing the tank and therefore to the price which that supplier is currently charging. Because the most efficient way to for suppliers to deliver propane is by automatically filling tanks, many customers agree to this arrangement with their supplier. Automatic fills also decrease the chance of a customer running out of propane. The problem is that most customers are unaware of the price they are paying per gallon for their delivery. In order to exercise at least some control over their supplies, customers should request notification by way of phone, email, or fax, as mentioned above. One to two days advanced notice will be enough time for the customer to compare the quote they are being offered with the Federal Government EIA Pricing Data and quotes from other suppliers.

If your supplier is unwilling to the one to two day price notice prior to delivery, contact your them and request that your arrangement be changed to will-call delivery status. You will have to be aware of your propane levels and contact your supplier when they are low. When you speak with them inquire what the price per gallon will be applied to your delivery and compare with competitors. If you find a serious discrepancy you need to bring this up with your supplier. Sometimes supplier reply that will-call customers do not receive the level of service or the better pricing reserved for automatic delivery customers. If this is in fact the case, you should consider switching suppliers or purchasing your own propane tank.