Why Do Propane Prices Fluctuate?
Why do propane prices fluctuate?
Generally speaking, any commodity falls victim to the rules of supply and demand. Where there is excess supply, prices may drop. Inversely, where the demand is high, prices will increase in an attempt to create balance. Propane is no different — prices rise when demand is highest during cooler months and prices fall when supply begins to increase as it warms outside.
When are propane prices the lowest?
Propane tends to drop to its lowest price in the summer. Inventories build up, when there is less demand, causing prices to fall. Each season brings new demands, challenges, and prices for heating your home or running your appliances.
Why have propane prices gone up?
Unexpected weather patterns can cause changes to pricing. If the winter is colder than normal, prices can rise as the inventory is depleted but demand remains high. Similarly, longer winters cause inflated prices as well. Earlier cold weather can deplete the inventory sooner than normal, and the longer people have an increased need for propane, the less there is, and this drives the price up.
How to avoid paying the highest price for propane?
Fixed Price Program
The easiest way to avoid paying the highest price for propane is to find a propane supplier with a Fixed Price Program.
A fixed price program is where you receive a single, fixed price that is locked in for the duration of your heating season. At Primemax Energy, our large purchasing power allows us to obtain the best prices by negotiating with our wholesale propane suppliers. As a result, we are able to offer our customers a fixed price that provides you with stability and consistency in a volatile fuel market.
Tip: Our Equal Payment Program allows residential homeowners to pay for propane in 12 equal monthly amounts throughout the year.
Floating Price Program
While many propane suppliers offer a Floating Price Program — when winter is on the horizon, the last thing you want to worry about is heating your home.
A Floating Price Program will adjust your propane price throughout the year, based on market peaks and valleys. Each time you request a delivery, you will be charged the current market price for the amount of fuel that you are purchasing.
Many look at propane as an expensive alternative to electrical heating. While there can be more upfront costs from heating with propane, there are significant long-term savings associated with this type of heating system.
The true cost of switching to propane depends on each individual customer. Each customer has specific requirements for usage, tank size, and delivery, but understanding how the price fluctuates can help you make more informed decisions about your propane service.