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Propane Price Pain

CEDAR RAPIDS ( CBS2/FOX28) - Cheryl Dietz keeps a close eye on the 1,000 gallon propane tank used to heat her home and decided to wait a little longer to fill it after prices climbed to nearly two dollars a few weeks ago.  When she checked back on Tuesday hoping the cost might have dipped a little, she says she couldnt believe what she heard.  I called yesterday to two different propane suppliers and one was $2.59 and the other was $2.65.  Today, just out of curiosity I called again .. three dollars and 97 cents a gallon.

Dietz is one of many rural homeowners and farmers who are suddenly experiencing sticker shock at the propane pump.  Prices jumped 60-cents in the past week and according to the Iowa Department of Agriculture they skyrocketed nearly one dollar just overnight between Tuesday and Wednesday. Deb Grooms the Executive Director with the Iowa Propane Gas Association says its something of a perfect storm of propane problems.  She says the price spikes started in the fall during a late harvest for farmers that required propane for drying corn.  Brutal cold and an increase in propane use for home heat immediately followed.  Add that to increased exports to Asia and analysts say you have a classic supply and demand impact on price. 

Grooms says its actually more a case of the supply not being in the same place as the demand.  She says the dwindling stockpile of propane in the upper Midwest and Northeast has her team frantically trucking fuel from down south.  Right now we have transport trucks in Hattiesburg, Mississippi and Conway, Kansas .. and as we speak I believe the governors office is talking to the lieutenant governor down in Texas for help.   Many local propane dealers we contacted today did not want to talk about the LP prices and problems.  One told us If I do, my customers will panic and the guy with a half tank today, will want it filled tomorrow and that just makes it worse. 

The Department of Agriculture says even many local dealers are losing money.  Many have long-term contracts with customers that are locked in at lower prices, so the increase means propane dealers are taking the hit.  The ag department says its heard of some suppliers asking customers not to top off their tanks right now, but to just order what they need until the supplies can be restocked. In the meantime, Dietz says at her house they have her over an empty barrel of propane.  I dont know how a lot of people including myself are going to be able to afford to fill our propane tanks to stay warm for the rest of the winter.

 Analysts say for right now, Mother Nature is pretty much in charge and the propane problem wont get better until the weather does.

 

 
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