Propane wholesalers and retailers work hard to protect consumers from “sticker shock.” Many retailers purchase advanced supplies of propane at lower contract prices to protect themselves and their customers from the potentially higher seasonal prices. Plus, many propane retailers offer balanced billing payment plans that allow customers to spread their projected annual cost of propane over many months, spreading out the cost of seasonally higher bills. Retailers also encourage customers to consider filling their tanks before the start of the heating season, rather than waiting until it is empty. A regular delivery schedule can also help offset higher season pricing.
Propane retailers are just as worried as their customers about rising propane prices. The wholesale prices paid by retailers increase historically at a faster pace than retail prices. In 2005 (latest available data from the Department of Energy), every energy source recorded increases over 2004. Home heating oil costs increased 24 percent from the previous year (from $1.548/gallon in 2004 to $2.048/gallon in 2005). Natural gas has seen a 16 percent increase, from $10.75/1000 cubic feet in 2004 to $12.82/1000 cubic feet in 2005, representing the second largest increase, followed by a 13.8 percent increase for propane (from $1.443/gal in 2004 to $1.674/gal in 2005.), and a 4.8 percent increase for electricity, which moved from $.0897/kWh in 2004 to $.0942/kWh in 2005.*
Even during times of increasing energy costs, propane delivers excellent value and comfort, in addition to being a clean, safe, and reliable energy source. In 2005, propane cost $18.40 per million Btu (British Thermal Unit)- while electricity cost $27.61 per million Btu.* *Source: Energy Information Administration, Electric Power Monthly, September 8, 2006 (electricity) and Petroleum Marketing Monthly, September 2006 (propane).