Propane crisis: Dealers say patience will help situation

Nathan Baker • Jan 28, 2014 at 7:25 PM

Propane supply problems have caused shortages of the liquefied fuel across much of the country, but local dealers and dispensers say a little patience will see the region through the worst of this winter’s cold snaps.

Increased demand this winter in the Midwest, Northeast and Southeast has taxed the propane industry’s mostly truck-based delivery system, causing long lines and waits at major pipeline terminals and resulting in rationing measures in some areas.

Andy Redus, owner of Admiral Propane, said his sales representatives are encouraging customers to “shortfill” their residential tanks, putting enough fuel in them to get them through the coldest part of the winter, but not topping the tanks off.

“If I fill their tanks up today, they’re not going to need gas for another 60 days,” Redus said Monday. “Rather than filling up the tanks right now, and having gas left over at the end of the year, we’re shortfilling, and not keeping them all the way full right now.”

Most homes using propane for heating have an exterior tank between 120 and 500 gallons and have gauges showing the amount of fuel left inside.

Redus said customers are being advised to keep their eyes on the gauges and to call in to the dealer’s Blountville or Greeneville offices if they need to be refueled.

Admiral is guaranteeing a wait of only 2 to 3 hours if a customer runs completely dry of propane in the delivery area.

Barney King, owner of the E.G. Sales propane-dispensing station at the old Podo Shell on the Bristol Highway, said he has run out of fuel once this year, but an Admiral truck was at his business 30 minutes later to refill his commercial tank.

“We’ve been rationed, but so far we haven’t rationed any of the customers ourselves,” he said.

At the roadside business, customers can stop in with 100-pound or smaller propane tanks to have them refilled.

King said with temperatures in the next few days expected to dip well below freezing, demand for the fuel is anyone’s guess at the moment.

“It may be a little more expensive, but if we can make it through the rough period in the next few weeks, we should be fine,” he said. “It’s just a crunch to get it right now.”

The skyrocketing demand has been coupled with sharp price increases, felt from the supplier down to the residential customer.

In a month, the U.S. average weekly price of wholesale propane jumped from $1.64 per gallon to $2.11.

King said the increase in his own costs have driven up the price of filling a 100-pound tank from $55 to $75, and some dispensing stations are charging as much as $90.

On concerns that some businesses may take advantage of the shortage, Tennessee Attorney General Bob Cooper issued an alert Monday warning state residents of the possibility of price gouging.

The state’s Price Gouging Act is triggered during a declared state of emergency and it makes it illegal to set prices that are grossly in excess of the price charged before the state of emergency.

To ensure against demand-driven price spikes, Redus advised customers to take part in his company’s pre-buying program.

Under it, customers pay in the summer for their propane to have it delivered in the winter, saving them from peak demand fluctuations.

Customers who pre-bought their propane saved money in the last nine out of 10 years, Redus said.

“If you have the chance of saving money nine out of 10 times, I’d take that risk all year long,” he said. “Propane has gone up a lot in the last couple of weeks. What people should understand is if they would pre-buy, they wouldn’t have an issue at all.”

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