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Rise in propane prices drains rural wallets
February 2, 2000

BY JANE SCHMUCKER BLADE BUSINESS WRITER

Keeping warm will cost many rural families several hundred dollars more this winter than last.

Heating oil prices are the highest since the Persian Gulf War, and propane prices are the highest since December, 1996, largely because the Organization of Petroleum Exporting Countries decided to sell less oil.

Reliance Propane Co. on Secor Road was to increase its propane price 9 per cent today, to $1.19 a gallon, from $1.09 yesterday. That's a 50 per cent rise from last year at this time when it charged 79 cents.

"We have a lot of calls of people checking prices, and the answers they get aren't what they want to hear," owner Harold Miller said.

L.A. Bexten, Inc., of Ottawa Lake, is charging 99 cents a gallon, up from 69 cents a gallon last year at this time and a rate that an office worker said isn't profitable.

Local residents paid as much as $1.40 a gallon for propane as recently as 1996. This winter's prices seem so high in part because last year's prices were low. And that's part of the reason that prices are high now, said Dan Myers, executive vice president of the National Propane Gas Association.

Homeowners who locked in propane prices last summer will realize considerable savings at the heating season's end. (Toledo Blade photo by Diane Hires) At the end of last winter propane was at such a surplus that wholesale prices dropped to 22 cents a gallon, compared with 70 cents today. At that price, plastics makers who choose from naphtha, ethane, and other petroleum products to make their wares started using propane.

Also, propane exporters sold their gas to Asia instead of the United States when prices here were so low. U.S. imports, which account for a small percentage of the country's propane sales, were one-seventh of normal when prices were the lowest last year, Mr. Myers said.

A few area families who locked in home heating prices last summer are benefiting now.On July 15, Catherine Schramm paid 69.9 cents a gallon for 1,100 gallons of propane, which should be enough fuel for a year for her three-bedroom ranch house.

By fall, prices were rising.

The first time a driver delivered to her home in Wood County's Middleton Township the cash price would have been 87.9 cents, the next time 94.9 cents, and now well over $1 a gallon.

Paying for a year's worth of propane at July's prices saved her at least $200, she estimated. The previous year when she had paid ahead, she saved $16 - hardly enough to cover the interest she would have gained by putting the money in the bank.

Heating oil prices were pushed up further by colder-than-usual weather on the East Coast recently, said Dan Gilligan, president of the Petroleum Marketers Association of America in Virginia.

Businesses that buy natural gas at a cheaper rate by agreeing to be cut off when demand peaks generally switched to heating oil when they got those rare cut-off notices this winter.

Natural gas is usually the cheapest heating fuel, but lines are not installed in rural areas. As with propane, natural gas prices are the highest since the winter of 1996-97, although increases have not been as dramatic. Prices this winter are up about 8 per cent from last winter, but they're still 11 per cent lower than in 1996-97, according to Columbia Gas of Ohio, Inc.

Rise in propane prices drains rural wallets

How is the propane price where you live? Or, are you using your Y2k supply?

-- Maher Shalalhashbaz (mahershalalhasshbaz@mail.com), February 02, 2000

Answers

$1.09/gal last friday here in northern Michigan.

-- JB (noway@jose.com), February 02, 2000.

I normally have to pay $1.59 a gal delivered normally, so I expect to get it stuck to me badly next refill. I plan to call tomorrow and find out what everyone is charging...I expect that it will SUCK.

Might be time to look into that woodstove water heater rig...anyone know where to get diagrams/plans?

-- Bill (billclo@msgbox.com), February 02, 2000.

www.hotpro.com

click on "aquafire"

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-- Squirrel Hunter (nuts@upina.cellrelaytower), February 02, 2000.

Because of Y2k we bought gas logs last fall and that is the only place we use propane. However, we are now heating entirely with the gas logs. Yesterday, I paid $1.399 per gallon, which is a little higher than other dealers in the area. But I locked this price in for a year in December. So will probably come out smelling like a rose. However, gets much higher and it will be cheaper to run the electric furnace....that is until the power plants also run out of fuel. Ain't life fun? By the way, I am in North Central Florida.

Taz

-- Taz (Tassi123@aol.com), February 02, 2000.

While some people gave Gordon and Downstreamer grief everytime they posted information on oil, I took the action of "preparation" to lock in my propane through summer at 89 cents.

Thank you Gordon, Downstreamer and all others with information on oil. For those who constantly gave the .gov don't worry be happy line, hope you aren't paying for your heat as you go.

-- Squid (ItsDark@down.here), February 02, 2000.

I built a multidevice manifold this summer. Slapped a new 500 gal tank on it, and with the two 250's I already had, can now supply either the gas fireplace or the gas cookstove from any tank. Then filled them all on Dec 15. Should be good for about a year and a half or longer at our current usage levels. When I filled I paid 69 a gal.

Now I am starting to scrounge for thickish sheet steel as I intend to build a methane digester to make my own low pressure gas.

-- pliney the younger (pliney@puget.sound), February 02, 2000.

Pliney --

Can you link me to plans for a methane digester?

TNX

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-- Squirrel Hunter (nuts@upina.celrelaytower), February 03, 2000.

It's not often that I feel like a genius, but this is one of those rare times. Ordered propane for our new furnace in October....leased my tank for $222.00 (for 5 years) and locked in the price of my propane at 45.9 gal. for 5 years also. My address is real, if you need information on this company.

-- Daisy Jane (deeekstrand@access1.com), February 03, 2000.

It's not often I feel like a genius, but this is one of those times. Ordered propane for our new furnace in October. I'm leasing my tank for 5 years at a cost of $222, and have locked in my propane price at 45.9 gal for 5 years also. My address is real, if I can be any help to anyone. (This company does business elsewhere in the US)

-- Daisy Jane (deeekstrand@access1.com), February 03, 2000.

Topped my tank off yesterday at $1.05. NW Indiana. Supplier said situation NOT looking good. Back in Dec., I filled up at about $.65 a gal. I call for price every week. I was told to expect prices to continue upward for sometime to come. Regards,

-- (He Who) Rolls with Punches (JoeZi@aol.com), February 03, 2000.

Pliney the Younger:

I've heard that hog manure gives off the "richest" methane. Years ago I saw a piece on TV that showed a British hog farmer that had made a "rube goldberg" contraption that was in the trunk of his car - it ran his car on hog manure methane. Best of luck; keep us posted on this project!

-- jeanne (jeanne@hurry.now), February 03, 2000.