If you are a propane user, you will want to know how propane prices fluctuate and what are factors influence the prices? All smart consumers want to explore chances to save some money. Are you wondering what makes a consumer smart? Well, consumers understand how the rates vary. They also identify opportunities for purchasing in a way that they save some money. As propane prices change from one location to another and at different times of the year, it is good to understand the pattern and trends.
What factors influence propane prices?
For all goods, the prices get controlled by a combination of trends of demand and supply. Propane prices also follow a similar trend. Here are some common factors that influence the cost of propane.
Supply – The below factors define the availability and thus the supply of propane for use.
- Price and availability of crude oil – Did you know propane is one of the by-products of crude oil and natural gas refining? Therefore, when the price and availability of oil change, so does the price of propane.
- Production – In the case of all commodities, the supply is a fundamental factor in defining the price. The amount of propane produced, and inventory levels have the greatest effect on the cost of propane.
- Export volumes – In the past decade, propane prices have been governed by the volume of exports. The internal demands are defined by cold temperatures and countries investing in petrochemical plants.
- Proximity: Transportation costs depend on the proximity of supply. You should find a reliable local provider for the best price and reliability of delivery.
Demand: Demand means the use of propane. The maximum amount of propane is consumed in the industry, followed by homeowners, commercial setups, and transportation companies. Weather and consumer need strongly determine the demand.
- Weather: While propane producers and providers plan for the winter season, abnormal weather conditions can lead to unexpected spikes. If the inventory is not enough to meet the demand, there will be a very sharp rise in propane prices.
- Consumer needs: Propane users consume propane for various day-to-day activities. Propane is used in offices, residences, heavy machinery, and these uses are easy to predict and estimate. Another chief usage of propane is in heating homes, which depends on the weather conditions.
Refill your tank before you run out of propane
If you are a homeowner, the last thing you would want is to run out of propane. The same goes for commercial setups and industries using propane. If you run out of gas, you will end up buying propane at the current rates. You will also end up paying a lot more for the transportation because of the urgency. Therefore, it is prudent to keep a check on the propane levels in the tank. By doing so, you will not have to deal with the panic and stress of running out of gas. The mantra to saving some money is to refill before you run out!
Time your purchase
As mentioned earlier, propane prices also depend on the weather and hence, the time of the year. So, it is wise to enter the winters with a full propane tank. Usually, the propane prices are lower in the fall as compared to winters. That is why it is advisable to schedule a refill early in the fall and save some money on the high prices later in the winter. Make sure you speak to your local propane provider and understand their delivery schedule and plans. Some propane providers have custom delivery plans that help customers with convenience and cost-saving.