Propane prices rising

www.zwire.com SHAWN CLUBB, The Telegraph March 14, 2003

The Telegraph/JIM BOWLING Jeff Senger of Senger Gas prepares to detach a hose after filling a tank with propane gas in rural Jersey County. Propane gas has skyrocketed in cost in recent months, with the increases blamed on a severe winter across much of Propane customers might have noticed a sharp increase in prices lately, which industry insiders attribute to multiple factors, including the probable war with Iraq and a long, cold winter. Barb Bollinger of Senger Gas in Grafton said the cost for her company to buy propane from a distributor had risen 48 cents per gallon in one week. "It’s hard to pass this on," she said. "Everything has totally been going up, up, up." Bollinger said a minimum delivery could be 300 gallons, which would cost the residential customer an extra $150 with the increase in price. "It’s hard to stomach and pass on when you’ve got people out there, elderly people, that are trying to make it," she said. Melissa Erker, a spokeswoman for ConocoPhillips, a producer of propane, said the company does not comment about pricing issues because of the multiple factors that come into play. Phil Squair, vice president of regulatory and technical services for the National Propane Gas Association, said the price increase is tied to the long, cold winter, the threat of war in the Middle East and workers’ strife in Venezuela. "Propane is produced from crude oil and/or natural gas," he said. "When you’re refining crude oil, propane is the first thing to come up. When cracking natural gas, propane is the first (product). As prices of crude oil and natural gas change, propane prices track that change." Squair said the prices have not been affected in the exact same way in every region of the countrybut that they haven’t been much different. "It’s been a pretty bad winter across the country," he said. "When you have a higher demand and you have a long, cold winter, and you have troubles overseas, all the winter heating fuels are seeing the same things as to price increases." Squair said the prices could drop a bit once the demand eases off. "I know the weather services are reporting average sustained temperature rises," he said. "A decline in use would, I think, cause prices to ease off. The price of propane is not a regulated thing. To the extent demand starts to dwindle, we’re going to see prices dropping. "I’m sure individual propane marketers are conscious of the prices they have to pass on to their customers," Squair said. "No one wants to keep going back to their customers with price increases." shawn_clubb@hotmail.com