What Affects the Price of Propane?

Written on: November 13, 2023

Global factors can make propane gas’s price fluctuate.

It has been increasingly challenging to manage a home budget. In only the last couple of years, we have seen supply chain woes, surging inflation, fuel embargos and other international dynamics that have affected prices on almost everything. At various times, prices of chicken wings, car parts, gasoline and other commodities skyrocketed. Some have yet to return to earth.

Propane is a commodity like all the other items listed above, but it has a unique set of factors that can make its price increase or drop. In Kent, Sussex and New Castle Counties, Delaware Propane provides the fuel that keeps First State households warm and comfortable. Our propane delivery ensures the uninterrupted operation of gas ranges, water heaters and clothes dryers — not to mention a range of home amenities.

It’s worth noting upfront that propane has been remarkably affordable in 2023. This summer, propane commodity market rates were over 50 percent lower than in 2022. Here are some factors that cause propane rates to fluctuate and programs we offer to stabilize your fuel billing.

Local and International Demand for Propane

As with any commodity, propane is vulnerable to price changes related to supply and demand. Residential and commercial demand increases in our part of the country during the winter. Propane consumers across the U.S. and abroad can substantially impact the price, too. Farms increasingly rely on propane for crop drying, and petrochemical producers need it to create plastic, paper, adhesives and detergents. This demand impacts pricing considerably.

Crude Oil and Natural Gas Markets

Propane is predominantly a co-product of natural gas extraction and crude oil refining. The good news for U.S. consumers is that almost all the propane we use in this country is produced domestically. That’s a big reason why propane’s per-gallon price tends to be lower than heating oil, diesel or gasoline. But as a co-product of natural gas and crude oil, propane’s price also tracks those fuels.

Several global issues in recent years have had severe implications for those fuels. They included COVID-related refinery disruptions, international conflicts and OPEC production cuts. We’ve also contended with the unfortunate influence of energy speculators looking to make a quick buck when price uncertainty happened in the market.

Production, Storage and Transportation Costs

America’s largest propane storage hubs are in Kansas and Texas. Getting that fuel to the East Coast can be costly — more so when roads are icy. Locally, storage and delivery costs can impact propane’s per-gallon rate. At Delaware Propane, we work hard to keep our costs low and pass the savings on to you.

Let Delaware Propane Take the Stress Out of Propane Delivery.

While propane prices may go up and down, your monthly fuel bills don’t need to. Delaware Propane can take the uncertainty out of the equation with our pricing and payment programs :

• Budget Plan — Instead of paying for your propane in full on delivery, you can spread your expenses over 11 even monthly payments. You’ll pay the same amount each month, and your winter expenses will drop!
• PreBuy — You can buy your full winter’s propane (minimum 300 gallons) before temperatures drop and lock in your rate.

Contact Delaware Propane for more information about these pricing programs .