FAQs about Propane Prices

Q. Why is my propane bill suddenly so much higher?

A. Consumers across the nation are asking the same question about their fuel bills. The fact is, in a free market economy, a variety of supply factors affect the pricing of all commodities-including propane. And as a by-product of crude oil, the price of propane usually tracks the cost of a barrel of crude.

Q. How does the price of crude oil affect propane prices?

A. About 55 percent of our domestic production of propane comes from the crude refinery process: as a by-product of crude oil, the price of propane usually tracks the cost of a barrel of crude. So, for example, when the OPEC oil cartel cut crude production in 1999 in an effort to increase prices, the price of propane also began to rise.

Q. Is propane the only fuel that can experience such a price increase? Would I be better off switching to fuel oil or electric heat?

A. No. Dropping temperatures across the United States, combined with other supply and demand factors, have raised the price of all fossil fuels, including heating oil, gasoline and natural gas. And, on a national average, propane heating remains a far better value than electricity: According to year 2000 U.S. Department of Energy statistics, it could cost more than twice as much to operate your range, water heater, clothes dryer or furnace with electricity as it does with propane gas.

Q. Is there anything my propane dealer can do?

A. Yes. We are working hard to protect you from "sticker shock." Keep in mind that we are as concerned about these price increases as you are. Although we have to pay higher prices to wholesale suppliers, We value you as a customer and is very reluctant to pass a wholesale price increase on to you. As a further hedge against the rising winter prices. We make sure that all of their routed customers receive a fill during the summer when prices are at their lowest.

Q. If supply is low and demand is high, do I have to worry about running out of fuel and not being able to have my tank refilled?

A. No. Overall, there is a sufficient propane supply to meet demand. Although a sudden blast of winter weather and activity in the international market will create increased demand for propane, the industry is moving quickly to meet the demand. There will simply need to be some shifts in product from areas where supply is high to areas where supply is low.

Q. Are propane price increases occurring nationwide?

A. Yes, although prices may vary from region to region. Propane is part of a global market, and its availability and price within the U.S. is affected directly by events within and outside our borders. A sudden blast of winter weather in parts of the country will stimulate increased demand for product. Sudden and sharp increases in demand can result in price escalations on the wholesale level. Your propane supplier will do everything he can to offer you the lowest price possible.

Q. Somebody must be profiting from these high prices. Who?

A. Traders or anyone else who had the foresight to secure propane before the prices started to rise. If they had been wrong in their speculations and prices had dropped, these same people would have lost money.

Q. Shouldn't the government step in a regulate fuel prices when they get out of hand?

A. The government tried price controls during the 1970s oil crisis, and they were proven to be ineffective. The government does offer assistance for low-income families through a Low Income Home Energy Assistance Program (LIHEAP). For information on this program or to apply for assistance, consumers can check with their local community action agency or state LIHEAP coordinator. More information, including the names of state directors, may be obtained by calling LIHEAP's general number: (202) 401-9351, website: www.acf.dhhs.gov/programs/liheap.


FAQs about Propane

Q. Is propane safe to use in my home?

A. Propane is a safe fuel to use in your home and business. Propane has a narrow range of flammability and cannot be ingested like gasoline or alcohol fuels because it is released as a vapor from a pressured container. In addition, award-winning preventive maintenance programs like GAS Check (Gas Appliance System Check) ensure that homeowners understand how to properly maintain their propane appliances and enjoy a healthy, safe environment.

Q. Is propane dangerous to the environment?

A. No. Propane is an approved, alternative clean fuel listed in the 1990 Clean Air Act and the National Energy Policy Act of 1992. Propane is one of the cleanest burning of all alternative fuels; new propane-fueled vehicles can meet the very tough Ultra-Low Emission Vehicle (ULEV) standards, and one model even meets the Super Ultra-Low Emission Vehicle (SULEV) standards. Propane is also nontoxic, so it's not harmful to soil or water.

Q. How can I be sure I'm handling the use of propane properly in my home?

A. NPGA has developed a comprehensive maintenance program called GAS Check (Gas Appliance System Check), in which trained technicians inspect propane systems and appliances in homes to ensure they are running safely and efficiently. The program also educates homeowners on the proper maintenance of propane appliances and how to handle propane safely.

Q. Is propane really a convenient fuel?

A. Yes. Propane is stored in portable tanks, so it can be used in areas beyond the natural gas mains. When used in vehicles, propane is also easily replenished and refuels at 10 gallons to 12 gallons per minute, similar to gasoline. More than 10,000 propane refueling sites are available across the country.

Q. Who uses propane?

A. Propane is a trusted and reliable energy source that is used by millions of Americans each day. It fulfills energy needs by burning cleanly and efficiently, giving consumers more value for their energy dollar. People use propane in or outside their homes for furnaces, water heaters, air conditioners, outdoor grills and appliances; on farms; for industrial uses such as forklifts and fleet vehicles; and in millions of commercial establishments, including restaurants and hotels that depend on propane for heating, cooking and other uses.
 

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