Propane is the cleanest and most efficient heating fuel for both household and commercial uses. It is used for many propane appliances such as space heating, water heating and drying clothes as well as cooking among other things. Since prices normally fluctuate from time to time, heating bills can increase or decrease depending on the current market price of propane. In this article, R.F. Ohl, a propane delivery Effort PA company, discusses some of the factors affecting the price of propane.
Propane Demand
The laws of economics dictate that when demand is high, the price of a commodity increases proportionally, and vice versa. Since propane is primarily used for space heating, demand for this heating fuel is normally highest during the cold seasons of the year. Demand affects prices since propane has to be transported from other regions to where demand is highest. The cost of transporting the gas will push up propane prices all over the country, including areas that are not experiencing extremely low temperatures.
Choice of Delivery Company
As you may already know, commodity prices differ from one company to the next. This is due to variations in operational costs and fixed expenses from one company to another. While some firms are able to keep their costs low, others are not. Your choice of propane delivery company, therefore, will affect the price you pay for your gas.
It is important to note that some expenses are fixed and mandatory for all propane companies. These include:
- Insurance costs
- OSHA compliance costs
- Fees collected by the state
- Hazardous materials reporting & compliance training
- DHS requirement for submission of security and emergency plans
- Employee background checks
- Company licensing fees
- Filing of driver qualification requirements
It is important to note that insurance is one of the largest expenses for propane companies and no company can be insured without meeting all the requirements listed above.
Consumption
As mentioned earlier, propane can be used for cooking as well as space heating, among other household applications. However, there are some people who only use propane for heating, which means their consumption is low. Prices are usually lowest and most competitive when the consumer uses a large quantity of propane for all their heating needs.
Ownership Of Propane Tank
To use propane, you need to have a storage tank for the fuel. You can choose to either buy your own tank or lease a tank from the propane delivery company. The first option gives you greater control over prices as you can choose a delivery company with the lowest prices and make a switch whenever you want. When you lease a tank from a propane company, you cannot call a different company to deliver propane when you run out. Since the company will be monitoring your usage, they will call you when your gas is almost depleted. This means you will pay whatever price they quote.
Price Protection Programs
During the hot summer months, propane prices are usually low, but nobody needs the fuel for space heating purposes. Consumers can use price protection programs, such as price cap agreements and pre-purchase agreements to control the price of their gas during the winter. Depending on the agreement, the propane company will deliver gas at a much lower price than what people would be paying during winter.
Propane Delivery Effort PA
We service Brodheadsville PA 18322, Effort PA 18330, Gilbert PA 18331, Kresgeville PA 18333, Kunkletown PA 18058, Saylorsburg PA 18353, and Sciota PA 18354. We also service all of Carbon County, Monroe County, Lehigh County, Northampton County, and Schuylkill County. Unhappy with your current propane delivery company? Switch to R.F. Ohl propane by calling us and speaking with a live representative 24/7.
Contact us today or give us a call at (610) 377-1098 if you have any questions.
The post What Determines The Price Of Propane? appeared first on R.F. Ohl.
No comments:
Post a Comment