Rushville Republican

February 4, 2014

Prices spike due to nationwide propane shortage

By Kate Thurston Rushville Republican
Rushville Republican

---- — With arctic temperatures and unpredictable weather, a nationwide propane shortage couldn’t have come at a worse time. Over 500,000 residents of Indiana have to nurse the propane they have left until they are able to get more.

Indiana is one of 24 states declaring emergencies and Governor Mike Pence insisted that the shortage is now a crisis.

On Jan. 14, 2014, the U.S. Department of Transportation declared a state of emergency for the Midwest, waiving hours of service limitations to ensure consumers can steadily receive home heating fuels that remain in unusually high demand. The exemption is set to expire on Feb. 11, 2014, but lawmakers are requesting an extension beyond Feb. 11 if necessary to ensure there is no disruption to delivery assistance for Hoosiers. Due to a variety of factors ranging from seasonal weather patterns to distribution challenges, upper Midwest propane inventories are already low.

National supplies of propane were depleted by a late harvest that increased demand from farmers who needed to dry an unusually large amount of grain before storage. As colder-than-normal temperatures spread across much of the country, supplies dropped to the lowest level ever during the second week of January. Trucks are having a hard time delivering the fuel because there has been a delay due to road conditions and the intense weather that many states are facing.

Kevin Disbro of Terhune Propane says the only change he has seen so far is price.

“Price wise yes, I am seeing a change but as far as supply, I haven’t seen it yet,” Disbro said. “We have an awesome supplier and transportation and we haven’t faced many issues because of this. We are not filling as much as we should with helps with conserving. We also have to travel a little farther to get propane. I know many places around the Midwest are seeing this worse than we are. We just need to make sure you turn your furnace down, don’t take longer in the shower than needed and use only what you need to while cooking if you’re using propane. It’s tough for people with the prices being at almost five dollars a gallon.”

The average gallon of propane for the month of January is $2.50 but since the shortage prices have more than doubled. Locally most prices are around $4.99 a gallon. Some places are seeing up to $6 a gallon.

Governor Pence stated that the wintry weather has increased the demand for propane for home heating and approximately 500,000 Hoosiers use propane to heat their homes. The current demand for propane exceeds local’s availability of supply. Pence also added that in the Midwest, 63% of the propane market uses propane for residential and commercial heating.

Locally most have seen a price spike but haven’t had to go without, yet.

“The only thing I have seen right now is the price increase,” Jeff Wilson said. Wilson uses propane to hear his home in Rush County. “I normally pay between two and two and a half for a gallon, it was about $4.99 this time. I know a lot of people have been getting lesser amounts because they can’t afford to pay that much and are waiting for prices to go down. We are turning our thermostat down to conserve. We also have an electric heater just in case.”

Pence has declared an energy emergency and suspended limitations on divisible loads for propane suppliers. He also released an additional $5 million in Low Income Housing Energy Assistance funds to local service providers and increased the LIHEAP crisis benefit from $400 to $550 through March 31. Pence is trying to better the situation but needs help from Hoosier. He requests that Hoosiers try to conserve more energy. When leaving home, turn your thermostat down a little more than you normally would and while at home keep the thermostat a little lower than usual.

Across the state, the commercial grain industry and farmers are stepping up to return any propane left over from the grain drying season to their suppliers to help ease the limited supply. Indiana Farm Bureau Inc., the Indiana Soybean Alliance, and the Indiana Corn Growers Association have called on their members to check stocks, and the Indiana State Department of Agriculture also has communicated with the commercial grain industry, asking for a recheck on stocks that might be available for resale.

During this shortage, the Office of the Indiana Attorney General will continue to protect the rights of Hoosiers who feel they are being subjected to price gouging. To file an inquiry, please call the Attorney General’s Consumer Hotline at 1-866-241-9753.

Contact: Kate Thurston at 765-932-2222, ext. 105