Nearly 8 million homes across the U.S. rely on propane for heating. While it's an essential component of daily life, the price can vary from season to season. Here's a closer look at some of the main issues that impact your out-of-pocket costs. 

What Determines the Price of Propane?

1. Oil & Gas Prices

Propane isn't obtainable on its own. It must be extracted from natural gas and petroleum.

The final ratio is nearly 1:1, with a slightly higher amount of natural gas in the mixture. For that reason, the final price is largely impacted by the current rate of both of these sources. 

While the U.S. leads the world in both oil and natural gas production, it's closely matched by Russia and Saudi Arabia. Political issues in either of those countries can have a significant impact on propane rates. 

2. Production Levels

propanePropane producers are scattered across the U.S., and the bulk of the fuel consumed in the country is produced at home. Along with new production, these companies keep a stockpile of fuel in case of emergencies or reduced supply availability.

During times of high production, prices are lower as the supply is plentiful. However, when inventory is low, rates go up. The current inventory needs to at least meet demand, and production needs to continue at a matching rate to maintain market stability and affordability. 

3. Weather

Household propane usage tends to peak in the winter when heating systems are utilized around-the-clock. Unfortunately, as demand rises, so does the occurrence of inclement weather, like snow and ice storms.

Such instances can inhibit oil companies and manufacturers from transporting fuel, which causes supply shortages. As a result, rates increase. 

 

Stay warm all winter long with a dependable fuel supply from Main Energy, Inc., in Wayne County, NY. Residents across Upstate New York have relied on the oil company since 2001. The team is committed to providing affordable oil, propane, and gasoline delivery. Review their flexible payment options online, and book a delivery today by calling (315) 597-5200.