Propane prices at some Iowa retail outlets have reached $5 a gallon, an increase of roughly two bucks in two days. Propane supplies are tight across the Midwest following an extremely cold start to the winter and a wet fall harvest.
Harold Hommes, a market analyst at the Iowa Department of Agriculture, says steps are being taken to help suppliers keep up with demand. “Twenty-four governors have issued hours of service waivers for the transport industry, so drivers’ hours are not counted as they wait in line (for propane),” Hommes said.
Hommes calls the hours of service policy by the Department of Transportation a “very severe restriction” to getting propane to where it’s needed in a timely manner. “You can imagine a trucker driving a modest hour-and-a-half or two hours to a terminal to get propane…if he has to sit there 6 to 8 hours, he’s essentially out of hours and can’t return home to deliver that propane,” Hommes said. “Lifting hours of service requirements was a huge benefit for the industry and we have a lot more propane ‘under wheels,’ if you will.”
The Department of Agriculture routinely surveys 28 propane retail outlets and the average price across the state on Thursday hit a record high of $4.18 a gallon. One year ago, propane prices in Iowa were at $1.39 a gallon. Hommes predicts prices will peak soon and begin to drop. “But, as we’ve seen in petroleum markets, the spikes that occur tend to take their time working their way back down,” Hommes said.
Governor Terry Branstad said Thursday that the State of Texas is waiving licensing, permitting and certification requirements on trucks and operators hauling liquefied petroleum to help ease the shortage of propane. Branstad told reporters that state officials are investigating why prices “going through the roof.” About 15-percent of Iowa homes are heated with propane, mainly in rural areas.
Earlier this week, Jerry McKim — the director of Iowa’s Low Income Heating Assistance Program, or LIHEAP — said the high price of propane has become a public heath emergency as many Iowans are having to choose between keeping warm and having enough to eat. The Executive Director for the
Iowa Propane Gas Association, Deb Grooms, is hoping more emergency funds will be made available to those who qualify for LIHEAP and rely on LP to heat their homes. “We are working closely with the energy assistance people at the Iowa Department of Human Rights to try and get the national congress to release more emergency funds,” Grooms said.
Senator Chuck Grassley has asked the Federal Trade Commission (FTC) to review the conditions that have led to propane cost spikes. “The recent propane supply shortage and price increases are causing hardship for the many rural Iowa families that use propane to heat their homes,” Grassley said. “I’m asking the agency that oversees business practices to look at the propane situation and see whether the price increases are legitimate or manipulated in any way to consumers’ detriment.”