Frequently Asked Propane Pricing Questions
What can I do to make sure my future propane deliveries are priced competitively?
Propane prices are typically not subject to government regulation. Without government regulation, propane suppliers are free to adjust their propane prices to any level at any time. If a propane consumer is using 1,000 gallons of propane per year and is paying 50 cents more per gallon than the propane price offered by most other suppliers in the area, that consumer could be overpaying by $500 or more per year. To avoid overpaying for propane, each propane consumer must proactively research and remain aware of the propane prices offered by competing propane suppliers offering service in their area. Since most propane suppliers choose not to publicly post their current propane prices, researching propane prices requires some detective work on the part of each propane consumer.
Propane consumers should never authorize their propane supplier to make automatic propane deliveries without knowing their exact propane price per gallon before each delivery. Whether the propane supplier publicly posts their current propane prices on their company website for customer comparison or agrees to communicate the current propane price per gallon through an e-mail, voice-mail or fax 24 to 48 hours before each delivery, it is absolutely critical that each customer know their propane price per gallon before accepting future propane deliveries. With knowledge of the propane price per gallon before each automatic delivery, propane customers can compare and verify that the price is competitive before receiving each delivery.
Conversely, if a consumer discovers that they have received an automatic propane delivery at a clearly non-competitive price AFTER the propane has been delivered, their propane company may charge a "pumping-out" fee (assuming this fee is in the suppliers service contract) if the customer insists that the non-competitively priced propane be removed from their tank and the supplier's service be discontinued (assuming that the customer is not obligated to a longer-term propane service agreement). In this situation, the customer may be obligated to pay either the higher propane price per gallon or a propane "pumping-out" fee AFTER the propane has been delivered. Bottom Line: Always find out and compare your propane price per gallon BEFORE each automatic propane delivery.
What are the important factors that impact my residential propane price?
Several factors impact a consumer's current residential propane price. Two of the very important factors include propane tank ownership (customer-owned tank or leased tank from a supplier) and propane price protection programs (pre-buy propane agreements and price cap agreements). In additon, propane consumers with a home heating system (one or more furnaces and/or space heating appliances) will typically use a higher volume of propane than a consumer that uses propane for cooking only, for example. As a result, home heating consumers should be paying lower, extremely competitive propane prices versus the propane prices paid by consumers that may be using propane for cooking only.
When a propane consumer owns his/her propane tank, this consumer is free to call any/all propane suppliers in the area that offer "customer-owned propane tank service" to compare their current propane price per gallon and order propane from the supplier of their choice when a delivery is needed. Since this customer is not locked into one suppliers propane service and propane pricing, many customer-owned propane tank consumers pay lower propane prices as they benefit from several suppliers aggressively competing for their business each time a delivery is needed. Propane consumers that own their propane tank have significant control over their future propane pricing.
Conversely, when a propane consumer leases his/her propane tank, this customer is typically locked into the single propane supplier that installed the leased tank and is subject to the propane prices charged by that single supplier for each future delivery. Most propane suppliers will appropriately recommend that customers with their leased propane tanks agree to an "automatic-fill" or "keep-full" delivery program to optimize routing efficiency and minimize the chance of a customer run-out. However, since most propane suppliers choose not to publicly post their propane prices, many customers receiving automatic-fill deliveries on random delivery dates without a propane supplier price protection agreement will be unaware of their propane price per gallon until they receive an invoice from their propane supplier requesting payment for a recent delivery. Without being aware of their propane price per gallon before future deliveries, these propane consumers have very little control over their propane pricing and may or may not be paying competitive propane prices for propane deliveries that occur in the future.
Taking delivery of any product without knowledge of the price prior to the delivery is unwise and puts consumers at a significant disadvantage. Hence, if a propane consumer is leasing a propane tank from a supplier without a price protection agreement, it is absolutely critical that he/she be informed of their exact propane price per gallon before accepting future propane deliveries.
There is absolutely no reason that your propane supplier's propane prices need to be a mystery until you receive an invoice requesting payment for a recent delivery. Propane prices should be just as openly accessible to consumers as the the illuminated signs displaying current gasoline prices clearly displayed to motorists traveling along public roadways. However, since propane is typically delivered to homes rather than picked up by customers at a propane plant, customers may request 24/7 access to their supplier's current propane prices through their propane suppliers website.
If the propane supplier providing your leased propane tank chooses not to publicly post their current propane price per gallon for customer comparison, contact your supplier and request an e-mail, voice-mail or fax 24 to 48 hours before each future delivery providing advance notification of your propane price per gallon. This will give you the opportunity to compare your supplier's current propane price per gallon to the Federal Government EIA Propane Pricing Data and other local suppliers to ensure that it is competitive before each future delivery.
If your supplier is unable to provide 24 to 48 hour advance price per gallon notification before each delivery, contact your supplier and request that your delivery status be changed from "automatic fill delivery" to "will-call delivery". This simply means that it becomes your responsibility to check your tank gauge and contact your supplier to order a propane fill when the tank level reaches a certain level - typically in the 20% to 30% full range. At the time that you contact your supplier to order your will-call delivery, simply ask your supplier for your propane price per gallon that will apply to your requested delivery. The next step is to complete your price comparison process as noted above. If you have any questions or concerns regarding your propane price per gallon, contact your propane supplier prior to your delivery.
If your propane supplier communicates that changing your delivery classification from "automatic delivery" to "will-call delivery" will make you a low priority customer receiving low priority deliveries, you should seriously consider changing your service to another propane supplier that will truly appreciate your business and provide excellent customer service regardless of your delivery classification.
While many customers lease a propane tank and others purchase a propane tank, it is important to consider the responsible party for any future tank maintenance and repairs. Suppliers are typically responsible for any tank repairs to their leased tanks, while customers are typically responsible for any repairs made to a propane tank that they own.
If you are leasing a propane tank from your supplier, your supplier is typically responsible for promptly repainting its leased tank, as needed, to help you maintain the appearance and value of your property. A leased propane tank with faded and peeling paint and a mismatched rusty lid should not be acceptable to any homeowner. If your leased propane tank is in need of replacement or repainting, contact your supplier's service department to have your tank replaced with a new tank or repainted as soon as possible. If you are being charged a tank rental fee, you should contact your supplier to request that the tank rental fee be suspended - or at the very least reduced - until the unsatisfactory tank is replaced or repainted. Summer is the best season to have your propane tank replaced or repainted as the process can be completed quickly without weather challenges.
When considering several propane suppliers to install a propane tank and provide service, beware of suppliers that only lease propane tanks or suppliers that strongly discourage you from purchasing your own propane tank. A reputable propane supplier will carefully explain the advantages and disadvantages of both purchasing vs. leasing a propane tank and encourage you to make the decision that is best for your situation.
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