Factors that Can Influence Current Propane Prices

Current propane prices are influenced by a lot of factors and market conditions. A major commodity, refined from other critical commodities that are traded on a global scale, propane prices fluctuate depending on different economic, climate-related, and political factors, as well as classic supply and demand. Spikes in pricing are usually because of dwindling supply, driving up costs for wholesalers and retailers. Propane is generally produced in gas processing plants and refineries at a fairly regular and steady rate all year-round. When supplies run low, there isn’t a ready source that can accommodate increased production. This is typically where price spikes originate. Imported supplies may pacify demand, but they do little to alleviate price increase because of the additional cost involved in their delivery.

Apart from market demand, there are many other critical factors that influence current propane prices, the first of which is the price of crude oil and natural gas. A byproduct of both commodities, propane inevitably competes with crud oil and natural gas-based fuels. However, since a larger portion of the propane gas that refineries produce comes from crude oil, its price has a larger influence on propane rates than natural gas.

Weather is another price determining factor for propane. Propane prices typically spike when cold weather strikes, especially when drag winters on, mostly because the cold weather slows production. This affects supply. Moreover, supply proximity can also affect current propane prices, because delivery from refineries to your main distribution point can take lengthy and costly route before reaching consumer end. Storage and transport costs add to the overall average cost of propane supply. Finally, propane prices are greatly influenced by market need. This stems from the basic supply and demand formula, which requires good balance to ensure sustainability and prevent higher prices due to higher demand and scarce supply.

The key is to look for a propane provider that offers flexible payment plans. The best companies understand that no two clients (residential or business) are the same, so they provide packages that best suit their customers’ unique propane requirements. You can choose from any of their propane payment plans based on your usage, lifestyle, and budget.  This is a great way to avoid large bills for propane gas deliveries.

About the Author:

This article was written by ThompsonGas. Family owned and operated since 1946, ThompsonGas provides propane services to more than 130,000 residential and commercial customers across 18 states. ThompsonGas is currently one of the top 15 propane companies in the U.S.

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11 Jul 2018

By Randy Thompson
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