It may be a bargain to grill those burgers this summer, but some analysts expect the flow of cheap propane to slow down when it comes time to start heating homes this winter.
Recent changes in the price of propane are mainly a result of its abundance in production around the United States, which has gone in just a few years from a net importer of the fuel to the world’s largest exporter. The U.S Energy Information Administration reports that as of 2009, the nation was importing almost 110,000 barrels per day of propane, a liquid byproduct of natural gas processing and oil refining.
But by November 2015, the federal agency said the nation was exporting almost 600,000 barrels a day.
And that number continued to grow, to a high of 884,000 barrels a day in February of this year, according to Debnil Chowdhury, a Houston-based director with the analytics firm IHS Markit. But he said exports have slowed up a bit in the months since, to about 770,000 barrels daily.
The country is exporting so much that the U.S. now supplies more propane to the world than the next four exporters combined, The Wall Street Journal recently reported. But while that demand for exports has helped an American energy industry hit by slumping oil prices, the prices overseas buyers will pay have started sending propane prices back up in parts of this country.
Still, at South Jersey Fuel & Propane in Cape May Court House, customers continue to enjoy low prices for the popular fuel, Eric Morano says.
“We’ve really been stable over the last four or five months, and we’re down from last year and before,” said Morano, an office manager.
The price for “heavy users” ranges from about $1.06 to $1.20 a gallon, according to Morano, but the company has seven different prices depending on the size of a delivery.
Frequent users of South Jersey Fuel & Propane’s product include summer visitors to Cape May County’s collection of campgrounds. Morano estimated that 3,000 or so customers in the county use propane to heat their homes.
Around the nation, the latest U.S. Census counted about 6.5 percent of households using propane or similar bottled fuels for home heat, mostly in rural areas.
But South Jersey Fuel doesn’t sell propane in the form that far more Americans use it, fueling the grills they love to cook outside on in the warm months. Chowdhury, of IHS Markit, said his firm has no figures on what percentage of propane goes to heating or commercial use against how much goes to grills.
Local gas grillers can find a wide variety of prices when they fill their propane tanks, or more commonly now trade them in for already full tanks.
At Ace Hardware in Northfield, the price is $20.99 when Ed Schultz goes out to the locked bins in the parking lot to help a customer trade in an empty tank for a full one. At Kmart a few miles away in Pleasantville, the price is $21.99 for an exchange tank or $54.99 for a customer with no trade-in
Home Depot and Lowe’s both list a price of about $20 for their propane exchanges. And at the Riggins gas station in Egg Harbor Township, the company posts its $16.99 exchange price in big, bold numbers.
But the gas station at Garden State Fuel, in Egg Harbor Township’s West Atlantic section, still fills customers’ own tanks, and is a popular stop for its price of $15 for a tank that starts at dead empty, says owner Naeem Khan. If the tank still has some propane in it, the cost drops, he adds.
“That’s been the price for a year or so now,” Khan says. “A lot of our customers come from Margate, Ventnor, Atlantic City to get their gas, so I do propane cheap.”
Back in Cape May Court House, customers are also looking to lock in their propane while it is cheap, Morano adds.
“They all like the prices at this point. We’ve had couple of the 500-gallon people, the ones who own the bigger tanks, filling up now even if they don’t use it now. They’re filling it for the season coming up,” he said.
That may be a good move, adds Chowdhury, the industry analyst.
“It’s too early to tell,” he said, “but we might run into a situation where although the U.S. looks very well stocked ... the Northeast and Midwest might have issues” with rising propane prices, particularly if a cold winter hits.