As a homeowner, you rely on propane gas to heat your space and keep you and your family warm and cozy year-round. However, not knowing why or when propane prices go up or down can make it difficult to create and stick to a budget.
Propane fluctuates less than some foreign oils. However, its price can still change throughout the year, so it’s important to be aware of some contributing factors driving the costs. Luckily, there are distributors who understand how to read the market so you can get the best possible price on propane.
While the cost of propane is influenced by the price of crude oil, the overall supply and demand for propane drives the cost. Distributors purchase large quantities of propane. Then, depending on the supply, the market price will vary. The supply is affected by several factors, ranging from inventory levels to how strong the export market is. If a propane supplier has limited quantities of propane, they will have to raise the price.
Similarly, the demand for propane will affect its cost. Factors like current economic conditions can significantly impact the amount of propane used. Additional variables, such as the availability of other fuels like gasoline, will also affect the price of propane. It’s also common to see a difference in demand depending on the time of year. As the demand increases, the supply decreases, causing suppliers to raise the price.
Understanding these fluctuations and trends can help you better predict how much you’ll pay throughout the year.
The overall supply and demand will have the most significant impact on the wholesale price of propane. However, several other factors can play a role, including:
While propane is most often compared to natural gas, there are some notable differences between these two common methods of heating homes. Both are fossil fuels, but propane is usually delivered to a storage tank at the home while natural gas is delivered to homes through a pipeline.
While both are clean sources of energy, propane produces lower amounts of pollutants and has a smaller carbon footprint than natural gas. This makes it a great option for homeowners who want to make environmentally friendly fuel choices. Overall, propane is a more stable, efficient and cost-effective solution for heating homes.
There is also a difference in how the prices are measured. Natural gas is measured in price per cubic foot compared to propane, which is measured in price per gallon. Because of this difference, it can be more difficult to make an even comparison without considering other factors like your location and your heating system’s efficiency.
Though propane prices do fluctuate, there are certain times of the year when you can expect lower costs. Because homeowners use their heating systems less in the summer, the demand for propane decreases, resulting in a lower energy bill.
You’ll still likely use propane to power some appliances, such as your oven, outdoor lighting or pool heater, but the usage will be more sporadic. Even if propane prices increase during this time, they will likely impact your energy bill less compared to the winter months when you’ll consistently use propane to heat your home.
If you want to take advantage of propane’s reliability and environmentally friendly benefits, several incentive programs and credits are available to help you save. Some examples include:
For more than 100 years, Foster Fuels has met the needs of homeowners throughout Virginia. With our high-quality fuel services, you can enjoy a warmer and more efficient home — even throughout the winter season.
Though the price of propane can fluctuate, we are committed to reading the market and choosing the best times to purchase propane so you get the best value. Along with providing fair, competitive pricing, we take pride in offering reliable and exceptional customer service.
Interested in learning more about how we can provide you with quality propane at affordable prices? We invite you to contact us today by filling out our online form.