Propane price near record high
July 3, 2008 · Updated 1:29 PM
"An energy crunch that started with skyrocketing gasoline prices last spring may prevent Whidbey propane users from ever again seeing another gallon of 98-cent propane.Early this month, propane prices peaked in the Northwest, soaring as high as $1.87 per gallon on Whidbey Island. That price is 89 cents higher than consumers paid last winter, and it has the phones ringing angrily for local propane dealers.A lot of folks have voiced their concern about where the price is going, said Nathan Corey this week. Corey is the owner of Corey Oil and Propane.There is good news and bad news about that price trend, Corey said. The good news is that the price of propane has dropped almost 20 cents in recent weeks, giving some relief to customers who need to refill their tanks. The bad news is that the $1.68 propane Corey is selling now is still almost 40 cents more per gallon than it was in September and 70 cents more than last winter. That price, Corey said, probably will not drop much more.I think prices will remain volatile, Corey said.Unfortunately for low-volume residential and commercial propane users, the rising prices of other fossil fuels have pulled the price of propane along with them. David Jacober, a branch manager for propane retailer Northern Energy, said the high price of natural gas essentially took away much of the propane supply early last fall. Natural gas companies have been raising prices for months, bumping them again last week with proposed jumps as high as 25 percent. Area oil refineries, which normally power their operations with natural gas, eschewed their regular fuel in favor of propane, which the refineries produce as a by-product of the refining process.As a result, there has not been as much propane to purchase. Jacober said the market is just getting used to this fact, which could give consumers another 10 cent per gallon break in the coming weeks off the $1.65 propane Northern Energy is selling. If the area does not experience a deep winter cold snap, propane prices may be done rising for a while and could drop even more.In a perfect world, (the price) should drop 40 cents in the next few months, Jacober said. However, that price probably will not drop back to 1999 levels.What we've seen is a redefinition of the cost of energy, Jacober said.The best consumers can hope for, he said, is a period of stability during which they can get used to using less propane. Conservation is the only way propane users will be able to reduce their energy bills.The consumer base is in too much shock to catch up with conservation measures, he said. "