INDIANAPOLIS (AP) — After weeks of propane shortages and high prices during the bitterly cold winter, some relief is coming to rural residents who have dealt with chilly homes and frustrations keeping their heating tanks filled.
Residential propane prices have fallen for a second straight week, down from about $4 a gallon in late January to $3.76 a gallon on Feb. 10, the U.S. Energy Information Administration said Wednesday in its weekly report.
Supplies of the fuel that 5.5 million U.S. households, mostly in the Midwest and South, use for heating have improved slightly due to efforts by the propane industry, the federal government and states. But the nation's propane supply remains low, and more blasts of winter cold would quickly send prices back up, said Roy Willis, president and CEO of the Propane Education & Research Council.
"It's really a weather-driven issue — another prolonged cold snap could strain supplies and prices for the next couple of months. Winter isn't done with us," he said Thursday. "When stockpiles get this low, and you get below freezing temperatures for a week to 10 days, consumption levels go up and up and up, and prices go right along with it."
National propane supplies were depleted by a late harvest that increased demand from farmers who needed to dry an unusually large amount of grain before storage. The colder-than-normal winter across much of the nation drained supplies further.
Willis said propane supplies have been replenished somewhat, helping lower prices slightly in the last couple of weeks, due to a collaboration between the government and industry to move supplies from large propane storage areas, primarily in the South, into the Northeast and Midwest. Propane shipments from North Africa and Europe have also helped, he said.
The improving supplies and warmer weather prompted Paducah, Ky.-based United Propane Gas announced Thursday it was resuming shipping the fuel to its prepaid customers in 10 states in the Midwest and the South days earlier than it had anticipated. The company had temporarily halted propane shipments to commercial customers in late January as propane supplies shrank.
"Propane supplies have loosened up and the warm weather indicates that the end of this national crisis may be in sight," UPG President Eric Small said in a statement.
But for now, the company is limiting its propane deliveries to 250 gallons per each of its prepaid customers, who can receive additional deliveries every 15 days.
Wholesale propane prices have also fallen slightly in the past week, dropping to about $2.61 a gallon as of Feb. 10, according to the Energy Information Administration's latest report.