Propane Pricing Tips


It is very important to conduct your own propane pricing research on a regular basis to ensure that your price is competitive. If you are not participating in a supplier pre-buy or price-cap program and your suppliers daily propane prices for customers with a leased propane tank are not publicly posted, consider the following methods of propane pricing research:


    1. Check to make sure your propane supplier is clearly printing your exact propane price per gallon on each delivery ticket. If these documents fail to show your propane price per gallon, contact your supplier and request that your propane price per gallon be included on future delivery tickets (in some areas, this is state law). Your propane price per gallon information from your current supplier is absolutely critical for your propane pricing research. Without being aware of your propane price per gallon, you will be unable to compare propane prices offered by other suppliers in your area.


    2. Call your current supplier once or twice per month, especially during the winter heating months, and anonymously inquire about their daily propane price per gallon. Make sure the quoted price is the standard daily propane price per gallon rather than a new customer reduced propane price per gallon. Anonymous pricing inquiries will ensure that your supplier quotes unbiased pricing information applicable to all customers using a specific volume of propane each year. When making an anonymous price inquiry, you should only provide your annual propane gallons, tank size, confirmation that the tank is leased and your zip code. If your supplier requests additional personal identifying information (i.e. your name, physical address or telephone number) inform them that you prefer not to disclose that information as you are interested in obtaining a true unbiased current propane price per gallon quote. Your goal is to monitor your propane price per gallon to make sure it is consistently competitive. For example, if your anonymous propane price quote is $2.10 per gallon, and you have a delivery ticket from the day before showing $5.90 per gallon, you should immediately contact your propane supplier for an explanation. Complete your research by contacting other suppliers in your area and inquire about their daily price per gallon at the same time. Ask for both the current customer and new customer pricing information for a customer that purchases your approximate propane volume each year. Note prices for both purchased and leased tanks. Is my prebuy contract really saving me money each year? Are my many years of supplier customer loyalty being rewarded with attractive pricing that reflects a long-term loyal customer? Will a price cap program save me money? Bottom Line: Only propane pricing research will answer these questions. Keep your research information organized in a file for comparison purposes in the future.


    3. After receiving a propane delivery, contact other suppliers to compare their price per gallon with the price per gallon that appears on your suppliers recent delivery ticket. Keep a record of the pricing information by date to review periodically.


    4. When viewing the Federal Government EIA Propane Pricing Data, it is important to pay close attention to the directional trend of propane prices, rather than the exact national average propane price per gallon. If the national propane pricing average is increasing or decreasing during the past few weeks, compare the direction of your suppliers propane prices during the same time period. The directional pricing movement will not be identical; however, your suppliers propane prices should follow the same general direction. Since propane prices typically follow a pattern of increasing while entering winter heating season and decreasing while exiting the winter heating season, it is very important to monitor the Federal Government EIA survey of propane prices and conduct periodic local propane supplier price surveys during these specific time intervals. You want to make sure that your propane supplier is responding to lower wholesale prices by sharing the benefit of lower wholesale prices with their customers through lower home delivery prices rather than leaving customer home delivery propane prices at a higher level while the wholesale propane prices may be rapidly decreasing. As noted earlier, since most propane suppliers choose not to publicly post their propane prices for customer comparison, it is critical that you conduct your own local supplier survey of propane prices and/or consider participating in an e-mail group with other propane consumers in your area to share and monitor the propane prices offered by various local propane suppliers to ensure that your home delivered propane price is consistently competitive.


    5. Be cautious when a supplier offers a "special program offer" that includes a "discount of 2 cents off our regular price" or a "discount of 5 cents off our regular price", especially if the propane supplier's prices are NOT publicly posted. The supplier should validate the "special discount offer" by publicly posting both the original price per gallon and the reduced price per gallon after the discount. This will give you the opportunity to clearly verify the "regular" and "discount" prices.


    6. Most propane service companies do a great job advertising their excellent customer service, industry technician training, safety record, remote tank level monitoring technology, etc. However, many of the same propane service companies fail to address one of the serious concerns of propane consumers: Easy access to the suppliers current propane prices to make sure it is competitive. In this age of computer technology, customers should not have to take personal time for telephone calls to their propane supplier's office to request the current price per gallon - which the supplier may or may not change moments or hours after each telephone price inquiry. The most efficient way for a propane supplier to share their current propane prices is to continuously post current pricing on their website. While some propane suppliers currently post their current propane prices on their website - many suppliers choose not to post their current propane prices on their website. Many of the suppliers that choose not to post their daily prices on their website claim that it is impractical to do so as their prices change so frequently. From a customer standpoint, this makes it even more important to share pricing on their website: To help their customers monitor the frequently changing propane pricing which will help customers budget their household heating expense. If your propane suppliers website does not display daily propane prices, contact them and request that they start posting their daily propane prices on their website. If your current propane supplier is unable to accomodate your request, perhaps you should find out if other propane suppliers in your area continuously display their current propane price per gallon on their website and, if so, consider changing your service to one of those suppliers.


    7. Some propane suppliers offer their customers a special "summer-fill program". This program gives their customers the opportunity to purchase propane tank fills at traditionally lower summer propane prices. If available, summer-fill propane prices are typically offered during the months of June through August of each year. Since suppliers will typically base their summer-fill propane prices on their current inventory cost, the summer propane prices will vary from one summer to the next. Some propane customers ask their propane supplier to short-fill their propane tank during the late spring resulting in extra capacity in their tank to maximize their propane savings at the lower summer-fill propane prices. Contact your supplier during the late winter to find out if a summer-fill program will be offered during the following summer.


    8. Propane prices are often compared to the unit price of alternative heating energy sources. Many propane industry websites offer an "energy calculator" as a tool for homeowners to compare propane prices to the unit price of these alternative heating sources (i.e. heating with electric). However, these calculators will only show a "snap shot" of the cost comparison at the time of the calculation. Propane prices and the unit price of other energy sources can change quickly which may cause the comparison test results to become useless. In addition, the propane prices used for comparison may apply to summer propane prices that may be significantly lower than the propane prices charged to customers in the middle of a cold winter when propane prices are typically higher and consumers use the highest volume of propane. For a more accurate heating cost comparison, ask your local supplier to provide their weekly history of propane prices for the past twelve-months. Then contact the supplier of the alternative heating energy source (i.e. your local electric power supplier) for a history of their unit price for the same period. Entering these actual weekly figures into the "energy calculator" for a twelve-month cycle will give you a better understanding of propane prices and their cost comparison to other energy sources throughout the past heating season.


    9. Ask your friends and neighbors about their propane pricing. When comparing pricing, make sure you consider if both tanks are leased or purchased and if the annual volume is similar. If all factors are comparable, then the pricing should be similar. If both propane tanks are leased and have similar capacity, the annual rental fees for the tanks should be similar. As an alternative to telephone calls, it may make sense to contact other propane consumers in your community and start an e-mail group that shares current propane prices with other members of the propane pricing e-mail group. For example, if the e-mail group has forty members, each homeowner will send a broadcast e-mail to the other members of the group sharing the suppliers name, the date of delivery, the number of gallons delivered and the price per gallon immediately following each delivery. This will give the groups members a very clear view of the amount and consistency of the propane prices charged by various propane suppliers in a specific community. After several months of sharing these propane price e-mails, some members of the propane pricing e-mail group may determine that they should switch to the supplier in the area that has been charging the lowest propane prices in the area as per the e-mail pricing communications. One other benefit of this type of e-mail group is sharing the summer fill propane prices offered by various propane suppliers between June and August of each year.


    10. If you currently lease a propane tank from your supplier and are trying to determine if purchasing a propane tank would save you money, consider the following test: (1) Call two or three propane suppliers in your area and request quotes to install a customer-owned tank with the same capacity as your existing leased tank. Make a note of the average price. (2) For each propane delivery that you receive in your leased propane tank this coming winter, look at your supplier's delivery ticket to identify the number of gallons and the propane price per gallon. Within 24 hours, call other propane suppliers within your area and request a price quote for the same number of gallons delivered to a "customer-owned tank" in your zip code. (3) At the conclusion of the winter heating season, calculate the total amount that you paid for propane delivered to your leased tank, plus the annual tank rental fee vs. the total that you would have paid for propane if you owned the propane tank. These figures will give you a good indication if it makes sense to purchase your own propane tank next summer.


    11. Each propane consumer is ultimately responsible for ensuring that his/her propane pricing is competitive. If it becomes evident during your price surveys that your supplier does not offer competitive propane pricing, it may be appropriate to change your propane service to another supplier. If applicable, the summer is typically the best season to change propane suppliers as the tank replacement process can be completed quickly without weather challenges. Many propane suppliers will change-out your existing tank at no charge, including handling all communication with your former supplier to ensure a seamless service transition.




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