Why Is Propane So Expensive In Tennessee?

It’s been a difficult year for our wallets, and rising fuel prices haven’t helped matters much.

In comparison to a year ago, gasoline prices have increased by more than $1 a gallon. The cost of natural gas has risen by more than 150 percent. Crude oil prices have risen to heights not seen in seven years, surpassing $80 per barrel. Propane prices are at an all-time high, dating back to 2014. The cost of electricity is also rising, owing to the industry’s substantial reliance on natural gas-fired power plants.

Advanced Propane is doing all possible to keep fuel costs low for our clients, thanks to our great relationships with our suppliers and our big propane storage capacity. That’s because increasing prices have an impact on us as well.

That may come as a shock, but it works the same way in your local supermarket. The neighborhood store does not make more money as food prices rise, such as coffee, bread, or milk. Any earnings are channeled to Wall Street investors and the corporate level.

If you’re having trouble keeping up with your propane expenditures this season, please contact Advanced Propane before you fall behind, and we’ll do everything we can to assist you. You can also seek assistance from your state’s Energy Assistance Program:

Factors That Determine Propane Pricing

The law of supply and demand. The price of a commodity can be substantially affected by demand changes. Prices will climb if the winter is harsh and long. The increased export of propane to meet global demand may have an effect on our country’s propane supplies. Several factors influence propane pricing, including season, production, and inventory levels. Late spring and early summer, also known as the “shoulder seasons,” are typically the best periods to fill your propane tank because prices are at their lowest. It’s also a good time to sign up for flexible payment plans like Pre-Buy to lock in your propane prices for the winter.

Weather. When the weather is really cold, propane costs may soar. Extreme temperature changes and bad weather can cause propane production to be hindered, resulting in scarcity and higher pricing.

Proximity to a source of supply. The closer you are to a major propane supply and distribution point, the lower the price of propane will almost likely be.

Today’s news. Propane prices are volatile due to events like as oil spills, pipeline failures, ransomware attacks, political disputes, and turbulence around the world, as well as the COVID-19 epidemic, which has wreaked havoc on numerous sectors in North America.

Demand on the market. Customers will pay more for propane throughout the winter, when they are most in need of home heating. During the summer, propane demand grows as more people utilize gasoline-powered vehicles and equipment.

We’ve been in the neighborhood for a long time and have solid roots. We have secure supply access. We’re doing everything we can to ensure that we can deliver, even if other companies can’t, regardless of the expense or difficulties.

We appreciate your loyalty and thank you for your patience. We shall get through these difficult times by all working together, as we have done many times before. Become an Advanced Propane customer today whether you’re new to the area or looking for a new propane supplier to rely on. We’d love to show you how we can make a difference in your home or business!

Tank Size

You might potentially have a smaller tank in this situation because you’re using a different energy source to generate heat.

Because the size of the tank impacts how much propane you’ll need to buy when you refill, it has an impact on the price.

If you have a small tank, you will just be required to pay a little fee.

If you have a 100-gallon propane tank, though, filling it will cost you $200.

If your propane tank is too big for your home, you may be paying more than you need to.

If the tank is too tiny for your home, you may not be getting the best value for your money because you will have to refill your propane tank every few weeks.

Propane costs vary depending on the size of your tank and whether it’s the proper size for your home.

Energy-Efficiency Of The Home

If your home isn’t energy-efficient, you may be wasting money unnecessarily.

Checking for leaks, gaps, or other sections of your home that aren’t properly sealed is one of the most critical components of making your home energy-efficient.

These areas allow hot air from within your home to escape to the outside and cold air to enter.

Your house will be better at keeping the warm air inside and the cold air out if you seal the leaks and seal the house.

Carpeted homes are simpler to keep warm because the fibers store heat better, but homes with hard flooring, such as wood or stone, are cooler.

During the colder months, you can solve this problem by laying rugs on hard ground.

This will assist absorb part of the heat, allowing your home to stay warmer for longer.

Propane is costly when your home is inefficient in terms of energy efficiency because you wind up consuming more than you need.

Crude Oil And Natural Gas Prices

The price of crude oil and natural gas is one of the most important elements influencing propane prices.

Because propane is made from the processing of crude oil and natural gas, it’s only natural that its price is linked to theirs.

When the price of crude oil and natural gas is cheap, it usually suggests there is enough supply to meet demand.

If the price of crude oil and natural gas is low, then the price of propane will be low as well.

If crude oil and natural gas prices are high, propane prices will be high as well.

If there isn’t enough supply but a lot of demand, it’s safe to assume there won’t be enough propane supply.

If crude oil and natural gas manufacturing and processing costs are high, propane manufacturing and processing costs will be high as well.

If the price of crude oil or natural gas rises, anticipate the price of propane to rise as well.

Supply And Demand

Several factors can influence the amount of propane available for purchase.

Propane’s supply, like that of many other items, has peaks and valleys.

When there is a large supply of propane, it usually means that pricing will be low.

However, if there is insufficient supply to fulfill demand, the price will rise.

Companies will raise prices to reduce demand and make supply last longer.

Because crude oil and natural gas are fossil fuels, there is a limited supply on the planet.

There will be no more propane to manufacture if there is no more crude oil or natural gas.

For example, during the COVID-19 epidemic, numerous facilities were forced to close because to health concerns.

Seasonal Demands

Any propane user will tell you that the price of propane tends to rise throughout the winter months.

Because propane costs affect the country as a whole, if one region uses more propane than usual, other regions will feel the pinch as well.

Winters are harsh in the northeast and northern portions of the United States.

Temperatures frequently drop below freezing, and snowfall can be several feet deep.

Because the cold air from outside is attempting to get inside, the furnace must work harder to keep the house warm.

When the northeastern United States endures a deep frost, a large number of people use more propane than usual to heat their houses.

Because they’re using more, there’s less propane available for everyone else.

As a result, they have no way of knowing how much propane homeowners will consume to stay warm.

The amount of production at oil refineries and natural gas facilities is also affected by the season.

When this happens, propane is in short supply at particular times of the year.

Propane is more expensive during particular times of the year due to supply and demand fluctuations.

Supply Proximity

If you reside far away from either of those states, your propane costs will be higher than for individuals who live locally.

The further away a target place is from a refinery, the greater the chance that anything may go wrong.

Suppliers will invest substantially in their storage tanks and the quality of their drivers to assist mitigate this danger.

These expenses are incurred as part of their operations, and they are compensated for them through the selling of their services.

Your propane pricing is also affected by the distance between you and a propane supplier.

Even if you live in Kansas or Texas, your supplier may be a long way away.

You’ll still be responsible for a portion of the expense of transferring propane from their storage tanks to your property.

You should expect a portion of your overall propane service cost to be made up of fuel pricing, driver compensation, and tank investments.

The longer it takes them to get to you, the more fuel they’ll require, and the higher the cost will be.

This is not the case for those who live in Texas or Kansas, or with their provider.

There are fewer expenses incurred throughout the transportation process because there are fewer miles to cross.

Propane costs vary based on your distance from refineries and suppliers.

Propane Exports

As a result, if something happens in one of the other nations to which it ships, supply may be affected.

For instance, if Europe is experiencing an energy shortage or an unusually cold winter, it may need to import more propane from the United States.

Since a result, the supply of propane in the United States will be reduced, as more propane was diverted to Europe.

If the United States has a very cold winter, the supply may be further depleted since those places affected by the cold may use more propane.

When demand for crude oil and natural gas rises, so does demand for propane.

If there isn’t enough demand for propane, suppliers will have a surplus supply, which will lower costs.

However, if other countries do not require natural gas or crude oil, production could be limited.

When demand for propane rises, there may not be enough supply to fulfill it, causing prices to climb.

Because the United States exports propane, natural gas, and oil, global events can have an impact on the amount of propane accessible.

If there isn’t a lot of propane available, the cost of propane at home will rise.

Leasing Fees On Tanks

If you lease a tank, you must pay a monthly charge regardless of whether you get propane replenished that month or not.

That’s because you’re paying for the opportunity to store propane that you don’t use or only use infrequently.

The advantage of leasing a tank is that you don’t have to buy new one if it starts to deteriorate.

If you already own the tank, you’ll have to spend another $2,500 to $3,000 to replace it.

Propane is expensive since you usually have to pay a monthly lease charge or a high price to buy and install one.

Type Of Propane

The majority of individuals claim they need their propane replenished, but they may be unaware that there are several distinct types of propane.

Although they all perform the same basic job, one is slightly cleaner and more efficient than the other.

Commercial propane is comparable to HD10 but is used for other purposes and would never be used in an engine.

HD5 propane is the most expensive because it is composed of 90% propane and 5% propylene.

Because it can cause engines to stick, this form of propane isn’t typically used in engines.

More Environmentally-Friendly

The fact that propane is touted as being better for the environment is another reason for its high cost.

While the process of refining propane, which is made from oil and natural gas, is not environmentally friendly, it burns cleaner than other fossil fuels.

As a result, some homeowners prefer propane over other fossil fuels since it is a somewhat superior alternative.

They understand that people are willing to spend a little more to help the environment.

What is the current propane price per gallon?

The current propane price per gallon is higher than the same period last year. This means that propane costs are anticipated to climb throughout the United States over the winter season, and home propane budgets will have to account for higher propane pricing now. The current propane price of $2.337 per gallon merely represents an average propane price; you may pay more or less for propane based on your usage and region. However, it serves as a solid benchmark for today’s propane pricing per gallon.

Why is propane going to be so expensive in 2022?

While the anticipated price increase is significant, it is still less than the average price of $3.07 per gallon witnessed during the peak of the 2014 propane crisis. A number of causes contributed to the shortage, including strong demand from the agricultural sector and pipeline problems.

Increased demand from the agriculture sector in the United States is the primary driver of the expected price increase. More propane is likely to be used by farmers to dry crops and fruits, as well as to power irrigation pumps. Liquefied petroleum gas (LPG) exports are also predicted to rise, with propane being one of the most popular forms.

The EIA expected that propane prices will average $2.68 per gallon in 2017, rise slightly in 2018, peak at $2.72 per gallon in September 2018, and then gradually decline to $2.59 per gallon in 2022. However, in its April 12th report, the agency altered these statistics, upping the average price predictions for 2017-2018 and lowering them for 2019-2022.

Despite the price increase, propane is projected to remain a reasonably inexpensive fuel when compared to other alternatives. In September 2018, heating oil is expected to cost an average of $3.36 a gallon, while electricity will cost an average of 13.5 cents per kilowatt-hour.

Finally, international uncertainty may influence the propane price projection for 2022. Natural disasters, political turmoil, and even terrorist activities can all have a negative impact.

What month is the cheapest for propane?

Fall officially begins this week, and despite the uncharacteristically mild weather we’ve had in the Hudson Valley in recent weeks, there’s no disputing that crisp days and nights are on the way in the not-too-distant future.

That makes now late September and early October a wonderful time to organize your next propane supply, among other things.

  • Demand is low, which drives up propane costs, while demand is at its peak when temperatures drop. Propane prices might also rise during the summer months, when people pack up their campers and RVs for a vacation or camping trip. Early fall is a “shoulder” season between these peak demand seasons, which means it’s often the most cost-effective time to refill your propane tank.
  • Weather is more consistent Sudden cold spells are more prevalent in late autumn and early winter, but less so in the early fall.
  • It keeps you prepared Extreme cold can quickly cause propane shortages, resulting in no-heat situations as people rush to fill their tanks. Cold weather can sometimes cause power outages, necessitating the use of propane to keep your family safe and warm. You’ll have piece of mind knowing that your family will be secure in any weather if you schedule your propane tank refill in the early fall.
  • You’ll have all the conveniences of home – You’ll be counting on gas to bring home comfort throughout the heating season, whether you’re firing up the propane grill for a game, lighting up your propane fireplace for a warm evening at home, or turning up the propane spa for a cold night bath. Fill your propane tank immediately to ensure that you’ll have comfort for months to come.

A 30 pound propane tank holds how many gallons?

A 30 pound propane tank holds 7 gallons and weights 55 pounds when filled. Large commercial barbecues, construction heaters, space heaters, propane hawk torches, and a variety of other propane applications all use the 40 pound propane tank.

Is propane more cost-effective than electricity?

The clear winner here is mains gas; it is less expensive to heat your home with gas than with electricity, assuming you can get it from the mains.

LPG and heating oil come in second and third, respectively, with electricity and bottled gas coming in last. The Renewable Heat Incentive definitely skews these numbers, especially when it comes to heat pumps that run on electricity, but as you can see from the chart above, a well-insulated home is by far the most efficient.

We hope that this clarifies the prevalent fallacy that utilizing electric heaters is less expensive than using a gas boiler and radiators to heat your home.

What factors influence propane prices?

Wholesale propane prices in the United States are influenced by a unique mix of conditions. Despite the fact that propane is a commodity, the factors that impact its price are distinct from those that influence the price of other energy sources. Crude oil and natural gas pricing, proximity to supply, output, amounts exported, weather, and cyclical demand periods are the key factors influencing wholesale propane prices.

Both crude oil refining and natural gas processing produce LP gas as a byproduct. Natural gas processors produce around 70% of the propane in the United States, although LP gas competes more directly with other crude oil byproducts. As a result, changes in crude oil prices are reflected in the wholesale propane price.

Transportation expenses have an impact on wholesale propane pricing. The majority of our country’s propane is priced based on distance from the two largest storage centers in Kansas and Texas, Conway/Bushton and Mt. Belvieu. The distance from these supply hubs may increase prices, but the distance from a local supply terminal will also affect pricing and delivery reliability to your company.

Because propane is a byproduct, the amount of propane produced by crude oil refining and natural gas processing cannot be altered in response to changes in demand or price. The majority of wholesale propane in the United States is generated domestically, with production increasing by 70% between 2009 and 2015. A minor percentage of the total is imported by land or sea.

To make matters even more complicated, the US also exports propane, which can lower available inventories in the US at the start of the heating season, as it did this year.

The demand for propane rises in the winter due to heating in homes, businesses, and farms. Winter 2017-2018 will be close to average, but cooler than the previous two winters. Normally, suppliers can build up stocks ahead of time, and any propane that is generated in excess of anticipated demand is sold to other countries. However, if unseasonably cold winter weather strikes, especially early in the heating season, wholesale propane prices are frequently impacted when demand outstrips supply.

Demand in one geographic location has an impact on wholesale pricing in other areas, therefore a cold winter in the northeast has an impact on wholesale prices in Texas. When weather catastrophes like Hurricane Harvey disrupt production and storage, prices might rise.

Because demand differs by industry and by household, wholesale propane pricing takes all sorts of demand into account. Corn drying demand, for example, is affected by total demand in years with a large corn harvest when the growing season has been rainy and the crop requires a lot of fuel for drying. As previously stated, the requirement for domestic heating drives up wholesale propane prices throughout the winter heating season. The main consumers of propane, petrochemical factories, see an increase in demand throughout the summer. The price of propane can be influenced significantly by petrochemical demand.

Wholesale propane prices are constantly changing, influenced by a variety of factors including regulation, energy policy, manufacturing patterns, and more. Even significant propane users have no control over the factors that impact wholesale propane prices. We work with propane suppliers around the country at Smith Gas Liquids to smooth out the kinks in the wholesale propane market for our customers. We fight on your behalf to reduce exorbitant charges.

What is the origin of propane?

Propane is made from liquid components recovered during the processing of natural gas. Ethane, methane, propane, and butane, as well as heavier hydrocarbons, are among these components. Propane and butane, as well as other gases, are created during the refining of crude oil.

Renewable propane is made using biomass-based feedstocks such as spent cooking oil, animal fats, or 20% dimethyl ether and is chemically equivalent to conventional propane. Renewable propane is currently produced in biodiesel refineries, notwithstanding the tiny number of producers.