If you’ve got a gas grill in your backyard, you might have already noticed that propane prices are up. They’re up in the investment markets, too — propane futures are trading at roughly twice what they were the past two summers. So, what’s going on?
Last month, Mitch Leff went to an REI recreation store to pick up a couple of cans of propane before taking his scout troop camping. What he found was an empty shelf. So he asked an employee to look for some in the back.
“She came back with four cans in her hand. And I said, ‘OK, I’ll, I’ll take two of those.’ And the lady who was sitting next to me said, ‘I’ll take the other two,’” Leff said.
It was the last four cans in the store. And the price?
“I want to say it was at least 20% more than what I was used to paying,” he said.
Why the price spike?
One: We’re exporting a lot of it overseas. Two: That freeze in the middle of the country down to Texas led to more consumption and less production in February and March.
Three: Right now, oil drillers in places like the Permian Basin in Texas just aren’t pumping as much as they used to. And because a lot of propane is produced as a byproduct of crude-oil refining, there’s less of it around.
Nikos Tsafos, at the Center for Strategic and International Studies, said it’s not just propane. Fuel prices, more generally, are rising.
“The simple explanation is the economy picking up again. And the supply system is not responding quite as quickly,” he said.
Limited supply and more expensive propane are inconveniences for people like Mitch Leff and his troop. But Lauren Ross, at the American Council for an Energy-Efficient Economy, said for many folks who live in rural areas, propane is what keeps them warm in the winter.
“Many of these households will have to make trade-offs: properly heating their house, keeping their family safe versus other necessities like food and medicine,” she said.
The Energy Information Administration said Americans should expect to pay almost 15% more on propane next winter than last, and that’s only if temperatures aren’t colder than forecast.