Getting the Best Propane Prices
February 18, 20223 mins read
Written by: Brandon Sisson

Getting the Best Propane Prices

Is your business paying too much for gas? Getting the best propane prices can be a challenge for organizations, particularly when pricing is in flux and contracts underlie real-world pricing.

Passing a gas station, you can immediately understand what the price at the pump will be and make informed decisions around where you want to fuel your car. Propane pricing is not as transparent. It’s hard to know whether your business is getting the right price on propane, and unless you’re an expert in the field, you may be left in the dark about whether you are getting competitive pricing.

In this blog, we explore everything your business needs to know about getting the best pricing on propane costs.

The State of Propane Prices in 2022

At the beginning of the pandemic, you may have heard that energy was performing poorly. While true then, things have changed dramatically over the course of two years.

Oil and gas stocks are currently outperforming the S&P 500, and are at seven-year highs. This comes on the heels of 2020, where they were the worst performing sector. With travel having resumed throughout most of last year, energy is back in a big way.

While prices have seen inflation across the board, propane is a peculiar outlier: the price per gallon of propane has gone up $1 since 2020. Prices are forecast to rise by more than 54%, according to the U.S. Energy Information Administration. This is the first time since 2014 that the price of propane has been above this price, and with winter pushing heating costs, demand has never been higher.

What led to the increase in pricing? Fracking created an excess of propane that caused pricing in the United States to dip significantly, and pipelines were created to funnel the excess fuel to other countries. As energy usage increases after the blip of 2020, there is now high-demand for propane, with less available domestically.

It is estimated that this year, households that heat with natural gas will spend around 30% more on heating this winter. For businesses, this price can be even more significant. How can you make sure you’re getting the best price on propane?

Why Do People Pay More for Propane?

As the price of propane rises, how can you ensure that you am getting the best price? With higher-than-average costs for heating, it is more important than ever to look at your existing contracts to make sure you don’t get locked in at higher pricing.

Every state has different rates and tariffs that impact pricing for organizations. Here are four areas which we analyze for lowering pricing on propane bills:

  • When propane prices are running low, your contract may have you locked into higher prices.
  • Side-stepping a contract and paying the going rate leaves you at the mercy of your supplier.
  • If you’ve expanded through acquisition, your new facilities may pay more.
  • If you buy propane across your operation, you could qualify for volume pricing.

One of the best ways to see savings on propane costs comes by analyzing the scope of your organization, and identifying the role that propane plays in it. For instance, if you operate across multiple locations, does each location operate off of a separate propane contract? If so, you may be able to get better pricing in volume by bundling it together. This can be common when an organization acquires new assets and those properties have existing contracts in place.

Comparing the best rates is the only sure way to see that you are getting the best pricing. At SIB, this lies at the heart of our cost reduction philosophy.

Getting the Best Propane Price for My Business

Depending on the kind of business you run, propane can be a high-budget item that many think is outside of the scope of their control. It isn’t. SIB helps organizations of all sizes identify and obtain the best contracts for gas, electricity, and fuel oil by:

  • Identifying areas of improvement
  • Uncovering billing errors
  • Obtaining refunds
  • Analyzing rate choices

Because of the complexity of utility billing structures, errors can often go undetected for years, leading to unidentified areas of improvement for expense reduction. SIB specializes in finding these errors through a utilities review audit, getting the best contracts, and saving you the most money. Contact us today for more information about our services.