Propane prices explode across Iowa and Midwest

 

Propane prices explode across Iowa and Midwest

 

 

By Mike Van Sickle
News Editor
mvansickle@thefayettecountyunion.com

 

 

If the long, cold winter of 2013-2014 isn’t enough of a hardship, propane customers across Fayette County, the state of Iowa, and the entire Midwest are being hit with soaring prices. As previously reported in The Union, propane prices began to creep higher during the harvest season in October 2013 before erupting over the past couple weeks.

Roger Loftsgard, Viafield-Clermont propane sales specialist, reported Monday that propane prices at the local cooperative have risen to $4.50 per gallon, an increase of approximately $1.90 per gallon from last week.

Fortunately, Loftsfard estimated that 85 to 90 percent of the cooperative’s customers had contracted prior to the big increases.

“It’s always a guessing game for the customer, but hopefully those who didn’t lock in their prices can hang in there, and the temperatures will begin to drop,” he added.    

According to a statement by the National Propane Gas Association (NPGA), the shortage began due to an unseasonably wet harvest across the Upper Midwest, and the large corn harvest was completed almost all at once rather than in stages. This required a huge amount of propane to dry the corn for storage.

More than 20 percent of domestic propane was reportedly exported in 2013, which also led to smaller reserves.

In addition, pipeline work slowed efforts to replenish wholesalers' reserves. Combined with the brutally cold temperatures, the demand for propane increased even more. Due to the depleted storage tanks, many terminals have since started limiting how much propane they will distribute at one time.

Loftsgard noted that Viafield has been fortunate thus far to be able to keep the fuel in stock.

Due to the drastic jump in pricing, Senator Chuck Grassley on Thursday asked the Federal Trade Commission (FTC) to review the conditions that have led to propane cost spikes. “The recent propane supply shortage and price increases are causing hardship for the many rural Iowa families that use propane to heat their homes,” Grassley said. “I’m asking the agency that oversees business practices to look at the propane situation and see whether the price increases are legitimate or manipulated in any way to consumers’ detriment.”



In the meantime, Grassley joined propane providers and other officials in encouraging anyone who may be eligible for federal heating assistance to contact the Iowa Bureau of Energy Assistance for more information.

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