We’re past the half-way point of winter and propane prices are holding steady, a big relief to Iowans who heat their homes with the fuel, especially after a record-setting price spike two years ago. Harold Hommes, a fuels analyst with the Iowa Department of Agriculture, says there’s a huge surplus of propane right now, setting up an unusual situation.
“The prices have stabilized,” Hommes says. “Our weekly survey had propane at $1.01 per gallon which is unchanged for the last three weeks. Even prior to that, we had a change of mere pennies.” Two winters ago, a propane shortage pushed prices to five-dollars a gallon. Hommes says unless there’s a prolonged cold spell, prices likely won’t budge, since spring will be here soon and demand will drop.
“A lot of times at this point in the calendar, we’re looking at seeing some significant bump-ups as we get into winter and demand pull starts rearing its head and we start seeing an uptick in propane prices,” Hommes says. “But so far, they have remained absolutely flat for nearly a month now.” Given the laws of supply and demand, the nation’s supply of propane is plentiful which is keeping prices very low and steady.
“Inventory levels are at around 74-million barrels,” he says. “To put that in perspective, two years ago when we had that shortage, the nation was down to about 25- or 26-million barrels. We’re at three times those levels.” While we’re just above a dollar a gallon now, liquid propane was retailing at $1.60 a gallon a year ago. In January of 2014, Iowa hit record high prices for L-P at just over $5 a gallon. About 183,000 Iowans heat their homes with L-P.
(Reporting by Pat Powers, KQWC, Webster City)