Ol’ Doc Propane again. Pricing is a common concern of many a consumer. And for some, price shopping equates to scraping rough, jagged fingernails on a dry chalkboard. Propane costs are wholly different from oil costs and therein lay the “rub.”
Sometimes oil and propane prices follow each other; up and down then up again, but that is usually quite coincidental. More frequently, oil and gasoline prices move opposite those of propane as they rise with summer “drive” seasons and decline during fall and winter months. Propane is used (at least in northern states) for heat, and prices begin to rise in the fall and winter—just the opposite of gasoline. Incidentally, those who use oil for heat have to buy and maintain their own tanks—propane tanks are provided by the propane company free of charge.
And then, there’s an annual usage factor. Many customers begin to compare their propane price with that of “Sally Warm across the street. Sally may use propane for heat, hot water, and a fireplace—maybe 1000 gallons or more per year—while they only use propane for heating water—maybe 200 gallons a year. Quite a difference when comparing procurement costs, transportation of gas from wholesalers to marketer/retailers and finally, bob-tail delivery to your home or office. Essentially economies of scale are just like those of milk—everyone knows, ounce for ounce it’s more cost effective to buy a gallon of milk versus a pint, quart or even a half gallon. Use more, pay less.
Certainly, much thought goes into setting prices for propane at the consumer level, and while LP gas may appear to be a commodity, your dealer’s service, product delivery and safe handling around your home and office is worth every penny.
Viking Propane; when you need us we’re there!
Please stay tuned for more helpful hints from Ol’ Doc Propane, your “LP Gastrologist.”