August 28, 2014

Propane dealers struggling with supply issues

Scarce supplies of propane are causing problems for many customers who rely on the gas to heat their homes or operate equipment. It’s also creating a crisis for suppliers, according to Wisconsin Propane Gas Association managing director Brandon Scholz.

Scholz says suppliers are having a very difficult time obtaining the gas they need to serve customers, greatly increasing the cost of transporting the fuel as well because they often have to travel greater distances to obtain the product. He says existing service contracts are also forcing many businesses to sell propane at a loss, which could create significant financial problems for them down the road.

Propane prices have spiked to around $4 a gallon in recent weeks. Scholz says those higher prices are a result of increased demand from the cold weather and extremely limited supplies of the gas across the country right now.

While the industry is scrambling to keep up with demand, Scholz does not believe there is a short term fix to the problem because supplies just are not there. He says the industry needs to take a serious look at improving its supply chain, so pipelines are not shut down for maintenance at crucial times of the year and tanker rail cars carrying the gas reach their destinations when they need to. Scholz says the federal government needs to reconsider export rules as well, which he says have also played a role in limiting the available supply.

State officials are urging propane customers to monitor their fuel levels closely and to order a tank refill when it reaches 30 percent. That should ensure enough advance notice to get a tank at least partially filled before it runs out. To deal with climbing prices, many residents can also apply for heating assistance by contacting local social service offices or tribal governments.