Propane Prices: Why Propane Costs the Amount It Does

Our customers often are curious as to how we price propane. A lot of research goes into pricing propane, the cost of which is influenced by many external factors. In this blog post, we will explain propane prices.

How Being a Commodity Affects Price

Propane is a commodity, which means that various external factors will change its price daily.  The main factors that determine the price of propane are:

• Supply & Demand: The availability of propane is weighed against its overall usage
• Currency Movements: Changes in the value of the U.S. dollar affect the price of propane
• Geopolitical Situations: Unsettling foreign affairs and conflicts in regions that produce commodities affects price and can disrupt supply
• Economic Growth:  Economic activity and development influences price
• Climate Changes: Weather patterns affect demand for propane. Colder weather typically increases overall demand.
• Transportation & Storage Costs: Propane must be stored and transported, so changes in the price of storage and shipping change the price of propane.

With so many external factors determining the price of propane, it is not surprising to see how the price can change from day to day, month to month, and year to year.

What Does Commodity Pricing Mean for the End Consumer?

Simply, it means that the price of propane is fluctuating and will continue to over time.  As commodity cost changes, the selling price to the end consumer also changes.  If the commodity cost of propane increases, the end consumer’s price will increase to reflect that change.  However, if the commodity cost of propane decreases, the consumer’s price will decrease in turn.

Pricing Plans For Our Customers

As one of the largest propane suppliers in North America, we use our buying power to secure competitive prices for our consumers. We know that our customers have different preferences when it comes to paying for propane. Some like to pre-buy and lock in a fuel rate for a heating season.  Some like to pay the market price for each fill. That’s why we offer a variety of pricing and payment plans so our customers can choose the ones that work best for them. From our fixed price plan, to our market price plan and our pre-buy protection plan, we know we have a pricing plan that can suit your needs. To learn more about the plans we offer, visit Payment » Superior Plus Propane.