What can I do to make sure my propane supplier is charging me competitive propane prices?
Propane prices are typically not subject to government regulation. Without the oversight of government regulation, propane suppliers are free to adjust their propane prices to any level at anytime. 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 pricing, researching propane prices requires some detective work on the part of each propane consumer.
Propane consumers should never authorize a propane supplier to make automatic propane deliveries without being informed of the exact propane price per gallon plus any applicable service fees BEFORE each pending delivery.
Whether the propane supplier publicly posts it’s current propane prices on it’s company website for customer comparison or agrees to communicate it’s current propane price per gallon through an e-mail, text, voice-mail or fax 24 to 48 hours BEFORE each propane delivery, it is absolutely critical that a customer be informed of the propane price per gallon BEFORE accepting each propane delivery. A propane customer should never be faced with a surprise situation of learning the propane price per gallon and any additional service fees (if applicable) that a propane supplier billed for a recent delivery for the first time by opening and viewing a propane billing statement AFTER a recent delivery. This situation can cause a propane customer to become frustrated and upset with a propane supplier due to the lack of advance knowledge of the propane price per gallon plus any service fees that were applied to the recent delivery Conversely, with advance knowledge of the propane price per gallon and any added service fees 24 to 48 hours BEFORE each pending automatic delivery, a propane customer has a brief window of time to make telephone contact with other local propane suppliers to compare and verify that the quoted propane price per gallon and any applicable service fees are indeed competitive BEFORE the propane delivery arrives.
Remember: It is each propane suppliers decision to post current propane prices on it’s website or not post current propane prices on it’s website. You are simply a wise propane consumer that wants (and has the right) to be informed of your propane price per gallon BEFORE each delivery. Insisting on being informed of your propane price per gallon BEFORE each delivery then performing a quick local propane price survey among local propane suppliers via telephone BEFORE your delivery arrives significantly reduces your chances of becoming a victim of propane price gouging!
If the propane price and/or any applicable service fees are not competitive based on a local competitive price and service fee analysis, the customer should contact his or her supplier for an explanation of the quoted propane price per gallon and/or any applicable service fees BEFORE the propane delivery truck arrives.
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 addition, 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 (i.e. pre-buy, price cap or a similar program), it is absolutely critical that he/she be informed of their exact propane price per gallon before accepting future propane deliveries.
Fuel prices, including gasoline for automobiles and propane for home heating, are subject to change due to a variety of political, economic, domestic and global reasons. Yet, it is interesting to observe that most gasoline station operators manage to publicly post their current gasoline prices on illuminated signs clearly visible to the public, while most propane suppliers choose not to post their current propane prices on their company website. Many propane supplier websites communicate that they do not publicly post their current propane prices because propane prices change so frequently. It is also interesting to observe that some propane suppliers do manage to display their current propane prices on their website – while other suppliers choose not to publicly post propane prices. If some propane suppliers can publicly post current propane prices – why do other propane suppliers find it difficult to publicly post current propane prices? Perhaps your propane supplier can explain this mystery to you.
Since gasoline and propane are both fuels that are subject to price change, propane companies should be capable of offering the same level of fuel pricing transparency as their gasoline station counterparts. Since home heating 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 cost of propane 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 you supplier’s service department to request that your tank be 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.
Some propane suppliers indicate that propane prices are based on each customers ‘usage’. If this is the case with your propane supplier, make sure that you contact your propane supplier and request a detailed written report of the current annual usage brackets and the propane prices associated with each usage bracket (for example, customers using between 300 and 500 gallons per year pay ‘X’ propane price per gallon and customers using between 500 and 700 gallons per year pay ‘Y’ propane price per gallon, etc). Ask your propane supplier to notify you in writing (written records are better if you need to question your suppliers future propane prices) when the propane prices associated with each annual propane usage bracket change in the future.
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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