Propane costs jump more than 55 percent in January
Date posted: February 10, 2014
SHERIDAN — A shortage of propane in some regions of the country has caused a spike in prices for local customers. Sheridan-based propane distributors say this area won’t be affected by a lack of supply, but the fact remains that consumers will have to suck up the costs of a higher energy bill.
Sheridan Farmers’ Co-Op Oil Company and Propane Manager Dennis Nelson said his staff fields as many as 15 calls a day from clients wary that the shortage will migrate to Sheridan.
“They listen to the news and say, ‘Oh my gosh, we’re going to run out of propane,’” Nelson said.
Nelson said he’s seeing local people wanting to stockpile surplus fuel if they can so they can last the winter. He said holding onto extra propane isn’t necessary, but some clients are struggling to keep their tanks full.
Nelson said he believes the shortage is happening because production is not meeting national demand, and reserves are quickly being depleted.
“I’ve been here 27 years, and the highest I’ve seen propane up to this point was $2.35 per gallon. With the shortage, per se, we’re up to $3.40,” Nelson said, adding that the price adjustment is reflective of increased delivery costs and no change in the mark-up at the Co-Op.
Nelson said there’s only so much he can do about propane prices. The price is set when it’s delivered.
“I’m sure they’re taking advantage of the situation, the suppliers,” he said, indicating he buys propane from five different sources. “They know it’s cold and they know we have to have it, so they’re damn sure going to make their two cents.”
Last month, propane customers saw a 55 percent jump in the price per gallon. Nelson said he’s seen evidence that the price hike is tough on his customers, especially those with a fixed income.
“Most of them are budgeted to the teeth anyway, and you add to their heating bill, and it really hurts,” Nelson said, adding that he has reduced the minimum delivery requirement and extended credit where he can to help people get through the winter.
“We do everything we can for the people that really need it,” he said, indicating that some clients have exhausted federal energy assistance programs and are still stuck with a bigger bill.
Heidi Justus heats her home, garage and shop in Parkman with propane and said lately, she’s been making efforts to reduce her energy consumption.
“We have turned down the heat in our house,” she said, indicating her thermostat is set as low as 62 degrees, but that her home heat is supplemented with a woodburning stove.
“We keep the heat in our shop and garage at a minimum,” Justus said. “But, it can’t be freezing out there.”
Justus said she and her husband, Chad, even walked around the house with a lighter to identify where drafts were moving through the house and then tried to plug those holes.
“We’re also throwing around the idea of putting a pellet stove in the basement,” she said.
Having taken immediate practical measures to get the most bang for her buck, Justus said footing energy bills in the winter takes a flexible budget.
“We’ve had to make some cuts where we can,” she said. “You have to shift your priorities around, and heat is definitely a priority.
“You’re not going to have as much going into savings because you’re paying for propane,” she said.
“You just do the best you can, and go from there,” Justus said. “You have to be very flexible as far as budgeting and you have to take the year as a whole and break it into months when it comes to propane.”
Justus said this year’s winter has caught her somewhat off guard, but she hopes to purchase an additional propane tank and fill it up in the summer time, when prices are lower, to give her a price break next winter.
“This winter has been a lot different that we thought,” she said, emphasizing that her summer energy bill is minimal, but her winter heating expense has soared.
Nelson said he sees the recurring cold fronts that usher in subzero temperatures for weeks as a reminder of earlier times.
“Winters like this used to happen all the time,” he said. “The more recent, more mild winters have given people a false sense of security.”
Justus said she’s thankful she doesn’t live in an area where there’s a propane shortage.
The Sheridan Co-Op serves approximately 2,000 clients from Kaycee to Ashville, Mont., and turns around about 210,000 gallons of propane per month in the winter.