And this.... Propane prices haven’t been so high heading into winter in a decade, which is bad news for the millions of rural Americans who rely on the fuel to stay warm.
At $1.41 a gallon at the Mont Belvieu trading hub in Texas, on-the-spot prices are about triple those of the past two Octobers. Of the two main U.S. propane futures contracts, one hit a high earlier this month and the other doesn’t have far to climb to eclipse the record it set during the blizzard of 2014. The average residential price tracked by the U.S. Energy Information Administration has jumped by 50% from a year ago, to $2.69 a gallon.
All manner of heating fuels are heading into winter at their highest prices in years and could climb more if the weather is cold. But propane is expected to take the biggest bite out of household budgets.
Most U.S. households and businesses are heated with natural gas or electricity, highly regulated markets in which consumers are insulated from price swings in the commodities and usually given time to catch up on payments before they go cold.
Buying propane is more like filling up a car. The fuel is paid for upon receipt and priced in the free market. Residential propane is delivered by truck, often by small firms over big swaths of countryside. Domestic inventories have been so drained by exports that it isn’t out of the question that some could be left for periods without propane no matter what they are able to pay.
“You have no alternative for heat,” said Robert Stier, lead petrochemicals analyst at S&P Global Platts. “Your options: Turn down the thermostat, put on a sweater or burn wood in a fireplace.”