September 18, 2014

Report: propane prices dropping

Propane users in Iowa are finally getting a little bit of relief after prices at some retailers climbed to nearly $5 a gallon last week. Harold Hommes, a market analyst at the Iowa Department of Agriculture, says prices have dropped 27-cents this week to a statewide average of $3.51 a gallon.

Last month, governors in 24 states issued hours of service waivers for the transport industry, so drivers’ hours are not counted as they wait in line for propane. This week, the U.S. Department of Transportation issued emergency declarations that allow propane tank operators to cross state lines and drive for longer hours to speed propane delivery in states where shortages exist, like Iowa. “I think those measures have all added up to provide some relief,” Hommes says. “Granted, (prices) are still at very lofty levels.”

A combination of factors is credited for this year’s propane shortage — the shutdown of a key pipeline, below-average supplies on October 1st, higher demand for propane to dry the 2013 harvest and higher demand from homeowners due to frigid temperatures. Hommes says supplies are improving. “We’ve also had some success in getting the pipelines to boost their shipments and at most terminals in Iowa now, the waits for trucks are minimal,” Hommes says. “Supplies, though I don’t think anyone is sitting on full inventory, inventories are certainly better than they were one or two weeks ago.”

About 15-percent of Iowa homes are heated with propane, mainly in rural areas. Hommes expects prices will drop more dramatically once temperatures warm up. “We’re still looking at more than double typical prices and we were up to triple (normal prices). We’ve got to find some relief soon,” Hommes says.

(Reporting by Pat Powers, KQWC, Webster City)