We post EIA retail and wholesale propane price data each week between October and March of each year (the winter heating months). The wholesale propane price will generally influence the price of propane paid by a propane home service customer.
We encourage all of our website visitors to view the propane pricing data each week to gain an understanding of propane price data applicable to a consumers state (if available) and/or national summary propane price data as per the EIA. If you do not have time to view specific information posted by state, at least view the summary of national retail and wholesale propane pricing data accessed through the following link: National Propane Price Data EIA.
Please underscore and remember this valuable phrase: A propane consumers best protection to avoid becoming a victim of propane price gouging is to maintain an awareness of exact propane prices charged by all local suppliers (including your own supplier) at all times, especially during the winter heating months when home heating customers use a lion’s share of home heating propane. The best way to maintain awareness of propane prices charged by local propane suppliers is to make telephone calls to suppliers on a regular bases to ask the current propane price per gallon.
It is also important for propane consumers to use the EIA propane price data in our website to detect propane pricing trends, rather than attempting to match the exact propane price per gallon appearing in the EIA data to the exact propane price charged by your propane supplier. Many factors can impact propane pricing including the annual volume of propane pricing consumed, the number and type propane appliances in the home, each specific suppliers appetite for profit per gallon delivered, among other factors. The EIA propane price data does not match the specific factors of location, size home, appliance mix, etc relevant to your home. As a result, the data will never match exactly for all deliveries throughout the heating season.
How can you use the EIA propane pricing data for comparison to your propane supplier’s propane pricing?
Let’s review an example (assuming that you are not on a fixed price or price cap plan):
Look at the page accessed through the link above showing National Propane Price Data EIA for October 2015 and November 2015. Look for the wholesale propane price data in each text description for the eight weekly entries between October 5, 2015 and November 25, 2015 – generally close to the end of each text description. Propane consumers should always review several weeks of pricing data rather than one or two weeks of data when attempting to determine the direction/recent trend of propane pricing. Between the dates noted above, according the EIA survey data, wholesale propane prices decreased from approximately 59/cents/gal to approximately 49/cents/gal., a decrease of approximately 10 cents/per/gallon.
After gaining a general understanding of the ‘trend’ of wholesale propane pricing for early October 2015 through late November 2015, take a look at your suppliers delivery receipts for the same period. Did your suppliers retail propane price decrease during the same period? Did your suppliers retail prices stay approximately the same? Did your suppliers retail propane price per gallon increase while the EIA wholesale propane prices showed a pattern/trend of decreasing?
If your suppliers retail propane prices were increasing while EIA data was showing a decrease in wholesale propane pricing during the same general time period, you should contact your supplier for discussion. Explain your findings to your propane supplier representative.
The changes in wholesale and retail propane prices in the scenario will not be incrementally identical. Several factors will cause the price per gallon to be different. One suppliers pricing strategy and profit expectations will likely be different from other suppliers pricing strategy and profit expectations. Each suppliers inventory cost will likely be different since retail propane deliveries are constantly depleting the fuel inventory while wholesale purchases to replace inventory are going to be quite different for each propane supplier. The business expense structure for each company will be different – likely resulting in different propane pricing strategies.
While all businesses (presumably) have a goal to maximize profits, a consumers primary goal is typically to find a local propane supplier that offers the safest, best service at the lowest propane price per gallon. A propane customer enjoys the freedom to evaluate local suppliers in the area of customer service and customer pricing. A propane customer also enjoys the option to change suppliers if the suppliers propane pricing and customer service are not acceptable.
If you do not feel comfortable with your suppliers response to your pricing question, it makes sense to start interviewing other suppliers in the area to find a replacement supplier. Also, since annual or multiple-year service contracts can limit a propane customers options to change propane suppliers until the end of the commitment period – propane customers should carefully consider all factors before signing a longer- term service agreement.