Written on: September 12, 2016
Propane expenditures for U.S. households has always been dependent on the energy efficiency and size of individual homes, heating equipment used, thermostat settings, markets size, and local weather conditions. There are other variables that affect the price that you pay from propane. These variables include global markets that trade propane gas and other primary commodities that refine propane.
Consequently, this makes propane prices fluctuate due to unforeseen economical, climate, political, and other contributing factors. This article discusses these factors and what prices to expect from your propane fuel delivery company.
About 4 percent of U.S. households primarily heat using propane. According to the U.S. Energy Information Administration (EIA), households are expected to spend less on energy fuel in 2016 with the projected decrease varying across regions.
According to the EIA report, Northeast households using propane will spend about $342 less on average compared to the previous winter. These prices will be 15 percent lower while consumption will also decrease by 9 percent. In the Northwest, Households are expected to spend $342 less in 2016. These prices are 5 percent lower than the previous winter, and represent 11 percent lower expected consumption.
The above estimates are determined by projected winter outlooks. However, keep in mind that predicting the weather is not always accurate, especially when making long range predictions! Keep in mind that there are other factors that affect how propane prices are set.
Forces of demand significantly affect propane prices. However, even though propane is a globally traded commodity, local demand alone is not enough to determine prices. Rather, the simple fact that this fuel gas is in demand in one part of the country is enough to raise its prices. A good example lies in the state of Texas. Texas is usually warm meaning that there is less demand for propane within the state. However, if the Northeast’s demand for propane increases, prices in Texas will also be high.
Market forces of supply and demand primarily affect propane prices. Additionally, operating costs of dealers (variable and fixed) also affect prices. Expenses include fleet management, payroll, taxes, insurance, fuel costs, and other numerous operational costs.
In order to get insurance, propane dealers must meet all the requirements listed below as well as other additional requirements set by their underwriter. This is because without insurance, dealers lose their licenses and close operations. The Federal, State, and Local government has imposed stringent operating requirements on dealers. These are:
A number of U.S. departments and jurisdictions regulate propane delivery companies including:
As a result, this makes compliance an expensive undertaking.
In conclusion, 2016-2017 winter propane gas prices are expected to be lower than the previous winter. However, several factors, other than expected household usage, come to play. Therefore, this can make it difficult to come up with an 100% accurate estimate. This will give you an idea of what is to come.
Homeowners who heat their homes with propane are interested in these projected prices because it affects them financially. This is due to the fact that expected prices for propane helps homeowners budget properly for home heating costs during the winter. As a homeowner, you can further reduce your home heating costs by finding a reputable propane company to adequately maintain your system. Furthermore, find a propane delivery company that offers the most affordable propane prices in your area.
Ace-Robbins specializes in exceptional propane delivery services in your area. Be sure to contact us so that we can answer any questions that you might have on propane maintenance, delivery plans, and pricing options. We have been in business since 1961 and since then, we have been providing quality services at affordable prices.
We service Kingston PA 18704, Luzerne PA 18709, Plymouth PA 18651, Wilkes Barre PA 18701, Wilkes Barre PA 18702, Wyoming PA 18644 and all surrounding areas.
Contact us today or give us a call at (570) 836-3232 if you have any questions.