A rural Southwest Missouri Senator is asking the Attorney General to investigate the steep increase in the price of propane.
Sen. Mike Parson (R-Bolivar) says in a press release, “when naturally occurring events such as storms and hurricanes happen, gas stations are prohibited from raising their prices to unreasonable levels. This is a supply and logistical shortage brought on by the industry itself. They should not be allowed to collect excess profits from their customers due to a situation of their own making.”
Parson reports that in less than 24 hours this week, the price of propane rose $1.25 at the wholesale level to $3.55 per gallon.
“While the cold weather was certainly a factor, it is clear that mismanagement by the industry for months in advance has contributed to most of the price increase,” he says. “According the U.S. Energy Information Administration, between September and October of 2013, exports of propane from the United States rose by 73,000 barrels a day. That level of exports so close to winter almost guaranteed a domestic shortage. If the exported propane was sold to other countries at a lower price and now our domestic customers are being charged more, that is a travesty beyond words.”
Parson says the forecast of extremely cold temperatures in the coming week makes the situation worse. Some suppliers are saying that even with the higher prices, the propane simply isn’t available to buy.
“Some in the industry are attempting to blame the wet corn harvest in North Dakota and Minnesota for the current crisis,” he says. “While propane is the primary fuel used to dry corn prior to storage, there should be no way a small market in one or two states would be able to cause a nationwide shortage.”
Even more frustrating, he says, is that domestic production of propane has increased dramatically in recent years.
“For this industry to artificially create shortage that Missourians will have to dig deeper into their pockets to pay for is something we should not tolerate,” Parson says. “I urge Attorney General Chris Koster to do everything in his power to hold those who created this disaster accountable. As chairman of the Senate Committee on Governmental Accountability, I intend to do all I can to assist in this effort.”
Parson stresses that this situation is not the fault of local propane dealers.
“This artificial shortage hurts them as well because they are not able to sell product if they are unable to purchase the amounts they need to supply their customers,” he says. “The blame for this lies squarely at the feet of the manufacturers.”
U.S. average weekly retail heating oil price and propane price increase, biggest price jump for propane in 4 years: EIA
The U.S. Energy Information Administration reports this week’s increase is the biggest price jump in four years. The administration reports residential prices for heating oil is up 4.4 cents to $4.06 a gallon, and propane is up 10.3 cents to $2.96 per gallon.
The 10.3-cent increase for propane is the biggest weekly price jump for propane since 12.9 cents on January 11, 2010, according to EIA data.
The administration reports that it surveys heating fuel suppliers every week to obtain the average U.S. heating oil and propane prices. The EIA also provides the average heating oil price in New England, which is the U.S. region with the largest number of U.S. households that use heating oil. A propane price is also provided for the Midwest, where propane is used more than in any other region for home heating and drying crops.
You view can view EIA’s “Today in Energy” brief on Midwest propane supplies and prices at: http://www.eia.gov/todayinenergy/detail.cfm?id=14711