Are your propane prices too high? Learn how to find lower propane prices.
If you don’t shop around for your propane price, how do you know if you are paying a fair price for it? I have seen far too many people who only use the first propane dealer they called years ago. People are creatures of habit, but this habit of yours might be costing your hundreds of dollars a year!
Believe it or not, some users of propane gas think that the government sets the price and that all dealers charge the same amount. Nothing can be further from the truth. Propane prices are set by each dealer. They can charge what ever they think their customers will pay. It is up to you to shop around and find the best deal for you.
Now there is nothing wrong with using the same dealer if they charge you a fair price and give you great service. But when was the last time you called around to other dealers to see what they are charging? I bet you will this year!
So how are propane prices set? Propane gas is a by product of natural gas processing and the refining of crude oil. The price of propane will tend to parallel crude oil and natural gas. If crude oil is going up, odds are propane gas prices will be heading higher too.
Other costs involved with propane are the dealer’s overhead expenses. Your propane dealer will have to take into account their overhead, which includes salaries and benefits. They must also figure their transportation costs too. If they have to travel a long way to receive their supply of propane, that will be reflected in the price you pay when you fill up. Also the distance the dealer has to go from his office to you home will also affect the price you pay. Another consideration is how much propane gas are you taking for a delivery? If you are only taking a small quantity, then you will be paying more per gallon than someone who takes a large delivery. This is something you should discuss with your propane supplier.
Now if you run into a situation where your current propane dealer or a perspective one won’t quote you a price, run away. An ethical dealer will be willing to tell you the price per gallon of propane you will be paying. When you are comparing prices, see if there are also any fees added on to the bill. This should be fully disclosed to you before you order gas from them. I have heard of some dealers adding a fuel surcharge to a delivery to make up for the high price of gasoline or diesel in their trucks. These are things that should be fully disclosed to you.
Some dealers offer plans where you can pre-buy you supply of propane. This will you require you to look at your bills from the past winter to see how much propane gas you used. With this information, you may be able to negotiate a better deal with your supplier. This will let them know how much propane gas they will need and may qualify you for a discount. This may help lower your propane cost.
Another idea is to band together with your neighbors who are also using propane to heat their homes. You can form a buying group. Think about it, if a neighborhood formed a group and went to dealers saying you are willing to buy several thousand gallons of propane this winter, don’t you think you would get the dealers attention and perhaps a great price? Even if you can’t from a group with your neighbors, you may be able to find a group in your city or county and become a member.
Better to own your propane tank or to lease one?
In some states you can buy a propane tank and have it installed yourself. When you own the propane tank, you can then have it filled by any propane dealer. However if you lease the tank, you may only be allowed to purchase propane from the owner of the tank. This of course limits your buying choices. Some states such are looking to change that law so the consumer will be able to buy propane gas from whom ever they want to.
How to find the average for propane prices in your state.
How much are propane prices today? During the heating season, which runs from October to the following March, the Energy Information Administration or EIA publishes the national and state average of propane prices. This can give you an indication of what propane pricing is in your area. Each Wednesday they will publish the current propane prices. Remember there are other factors that we mentioned earlier in this article that effect your price, but it will act as a guide as to what you should be paying. The EIA publishes the residential propane prices and wholesale prices for each state. You can visit their website here for more information.
So before filling up you propane tank this winter, be sure to shop around and compare propane prices to get the best deal available.
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