Raise the propane price or charge customer service fees?

The topic of propane supplier fees is considered by many propane consumers. Propane supplier fees can dramatically increase the cost of propane service for a household.

As we approach the end of the warmer summer months, many propane consumers are making decisions around propane service for the following winter heating season.  One of the areas evaluated when considering each prospective propane supplier is the propane prices charged by each prospective propane supplier.

It is important for consumers to carefully consider that some propane suppliers charge fees on top of the propane price per gallon for the propane fuel.

While propane supplier fees may be allocated to delivery truck maintenance and employee training among other fees, the additional fees can significantly increase a consumers annual cost of propane.

If you are unaware if your propane supplier charges additional propane delivery fees, the first step is to contact the propane supplier to find out.

If your supplier charges additional fees for propane delivery, it makes sense to isolate the amount of the fees from the amount charged for the propane fuel before the fees were added.  The best way to do this is to request the following information from your supplier:

  1. The total amount paid for the propane fuel during the past 12 months BEFORE the additional fees were added, LESS any annual propane tank rental fee and LESS any applicable taxes (if added).
  2. The total amount of the extra propane fees added to the deliveries during the same 12 month period.
  3. The total amount of gallons delivered during the same 12 month period.

With this information, it is easy to perform some simple mathematical calculations to determine the additional price added to each gallon in the form of supplier fees.  For example: (rounded numbers for simple calculations): $1,800 total propane cost for the year to purchase 1,000 gallons, less $300 allocated to extra fees leaves $1,500 paid for the propane before the fees.  The price per gallon without the fees would be $1.50 per gallon and $1.80 per gallon with the fees included.  The differential in the propane price allocated to the extra propane fees is a total of approximately $300 or approximately 30 cents per gallon.

Therefore, when shopping around to find the best deal for propane, the actual cost per gallon would be $1.80/gallon when comparing the propane price versus other local propane suppliers – not the $1.50/gallon price without the fees included.

This is important information to consider to ensure that your propane price comparisons involve ‘apple to apple’ propane price comparisons.

Best wishes for safe travels during this summer vacation season.