Rising cost of pro-pain
Smack dab in the midst of one of the toughest heating seasons in history, the price of propane has soared in recent days. The recent price surge has blind-sided dealers and customers alike.
Prices differ from region to region, but the increases throughout the state are stunning. A 400 gallon fill of propane as recently as two weeks ago in the Minot area was about $840. Tuesday, the same fill was up to $2,000.
“Something is going to have to be done. I mean, people are going to freeze. I don’t know what else they can do,” said Jeff Rodacker, Tri-N-Propane of Minot. “I don’t know how they are going to afford it. A lot of these people are on fixed incomes. I don’t know what they are going to do.”
“My gosh! I’ve been doing this for 40 years and I’ve never seen prices like this,” said Tom Gehringer, Propane Services of Mohall. “We’re getting propane. Nobody’s running out.”
The reasons for the rise from approximately $2 to $5 per gallon for propane are varied. Some cite the shutdown of the Hess plant at Tioga where the old propane gas plant has ceased operation during the transformation to a new and larger plant. However, many area suppliers don’t get their propane from the Hess facility.
“We get it from everywhere, even had some from Nebraska,” said Donnie Hoepner, Harvey Oil. “We were out last Friday but then got some in. It’s quite a hunt when you are looking for it. We had been told the price would be as high as $5 but it was a lot better at $3.69. Still, it’s ugly. It really is.”
Steve Eckart of Harvey is among the propane users who are having a difficult time believing the price could jump so sharply in little more than a week.
“It’s $4,000 to fill my 1,000 gallon tank to 80 percent. That’s crazy,” said Eckart. “What’s really shocking is that no one knows anything about it. Some of these customers don’t know. The propane price went crazy. My summer fill last year was $1.09.”
Some cities, like Harvey and Mohall, have no natural gas service and propane is a major heating source. Most rural farmsteads rely on propane too. With at least two more months of the prime heating season remaining, many propane customers are already feeling the pinch.
“It’s a bad deal,” said Rodacker. “If you don’t have any money, what are you going to do to get it?”
While suppliers scramble to meet the needs of propane customers, they too are reluctant to purchase large amounts of propane while prices are high. If they do so, they must pass the increase on to their customers. So, suppliers keep a close eye on the amount of propane they have on hand and on market prices. Most say they’ll buy when the price drops so their customers will pay less too, but the market remains uncertain.
A letter from the National Propane Gas Association stated a variety of reasons for the propane shortage and resulting price hike. The NPGA cited a late grain harvest and excess drying of grain, the polar vortex weather system and rail cars used for hauling crude oil from shale plays rather than propane.
North Dakota is not alone is dealing with the spike in propane prices. Government officials in Michigan and Ohio have issued statewide energy emergencies. Some suppliers in Indiana and elsewhere are said to be refusing new customers. The Cochin pipeline that carries propane to North Dakota, Minnesota, Iowa, Illinois, Indiana, Michigan and Ohio was closed for maintenance in December; yet another cause cited for increased prices.
“The price depends on when you get your load,” stated Rodacker. “It kind of bit everybody just overnight. The customer’s adjectives are all over the board. Most of them aren’t good.”
An average home requires about 200 gallons of propane per month during the winter heating season. That’s an expense of up to $1,000 at today’s prices.
Whether or not, or when, propane prices will increase or decrease remains unknown. For now customers who can afford propane have little choice but to dig down and pay the increased prices. Others may be forced to seek assistance from whatever source they can find.