While many Iowans have their air conditioners running during the heat of early August, one expert suggests they look ahead to wintertime and their home heating needs. Harold Hommes, a fuels analyst with the Iowa Department of Agriculture, says a very rapid rise in liquid propane prices last winter left many Iowans stunned and facing tough financial decisions.
“We’re encouraging people to be prepared,” Hommes says. “Last year was truly an unusual situation that caught a lot of people off guard. We had prices bumping up in that $4 and $5 level and we certainly don’t want to see a repeat of that.”
It’s a lesson learned in Economics 101 about supply and demand and Hommes right now, the supply is very good, so prices are low. “Propane prices are ranging from about $1.40 on up to the $1.70 range,” Hommes says. “Those are good summertime fill opportunities. Get that tank full going into winter and minimize obligations for what they’ll be facing for propane costs this winter.”
Prices peaked in January above $5 a gallon. About 90-percent of the Midwest’s inventory of propane is stored in underground caverns near Conway, Kansas. Hommes says supplies are plentiful heading into fall and winter.
“Right now, we’re sitting on about 22.5-million barrels which puts us 6.5% better than we were at this point one year ago,” Hommes says. “Unfortunately, we’re still slightly below our five-year average for this point in the calendar year.” About 15-percent of Iowa homes are heated with propane, mainly in rural areas.
(Reporting by, Pat Powers, KQWC, Webster City)