Corsicana Daily Sun, Corsicana, Texas

January 23, 2014

Propane prices flaring

By Janet Jacobs
Corsicana Daily Sun

Corsicana — Record winter storms in the Northeast and Midwest are having some impact in the South as propane supplies are being shipped north and east out of Texas. Local propane suppliers say they still have plenty of gas, but prices are going up weekly.

On Monday, a gallon of residential propane was about $2.49, but by Thursday prices were already at $2.75, and still climbing.

“Propane has gone up here in our region about 20 or 25 percent. In the Northeast the prices have gone up over 300 percent,” said Jeff Nelson, president of Nelson Propane in Corsicana. “Wholesale electricity has gone up, natural gas has gone up, all about the same amount. There’s such a great demand that the increase has been seen across all sectors.”

The problem isn’t a shortage of propane, but the location of the gas. Governors in half a dozen states have granted truckers permission to drive longer hours in order to bring in more propane for needy states, and much of that supply is coming from Texas.

“Technically, the nation isn’t out of propane, it’s just in the wrong places,” Nelson said. “We’re lucky because we have our own transports. We have absolutely no worries. We can go get all the propane we want. We’re pretty fortunate here that we’re not going to have any supply constraints. We’ll be able to keep our customers nice and warm.”

Star Tex Propane in Waco hasn’t had any problems wth supply either, but like all the providers their prices have also gone up.

“It’s not helping us, and it’s hurting the consumers right now with prices being so high,” said Joe January, general manager of Star Tex. “There’s still enough supply here. Some concerns would be if even more states come purchase here and make shortages for us. I just know we’re still OK and hopefully we’ll continue to be OK.”

John Paul Ross, who’s managing Ross Propane in Navarro County, gets his gas from Mont Belvieu near Houston and there’s no shortages there, but he is paying more dearly for it.

“Propane has definitely gone up,” Ross said. “But there’s no shortage. You can get as much as you need right now.”

The same can’t be said of states harder hit by the winter weather, he said.

“They’ve been really hit up there,” Ross said.

More than 14 million families and one million businesses across the nation use propane for heating and industrial uses, according to the Propane Education & Research Council.

However, part of the increased demand this year is because propane was used to dry out oversoaked corn crops this past fall, according to the U.S. Energy Information Administration (EIA).

“Propane prices in the Midwest will likely need to rise to keep propane in the region,” according to the EIA.

In the middle of January, average propane prices across the nation were 58 cents per gallon higher than the same period last year, EIA reported.

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Janet Jacobs may be reached via e-mail at jjacobs@corsicanadailysun.com. Want to “sound off” to this article? E-mail: Soundoff@corsicanadailysun.com