Average residential propane prices are already 39 cents a gallon higher than the same time last year, figures from the Energy Information Administration reveal.
The EIA, a branch of the US Energy Department, has just launched its annual State Heating Oil and Propane Program (SHOPP). The program provides data on heating oil and propane prices during the annual heating season, which run from October to March.
During the heating season, energy prices tend to rise in the Northeast and Midwest regions of the US in tandem with rising demand as temperatures fall dramatically. So the EIA provides weekly price monitoring data which it collects from 24 different states. The EIA says the data is particularly useful for policymakers and consumers in the event of fuel supply disruptions or unusually cold winters.
“Unlike natural gas and electricity, which are provided through utility companies, heating oil and propane are sold by independent dealers,” the EIA said. “Both dealers and their customers are subject to considerable supply and price uncertainty. SHOPP enables better communication regarding market developments between fuel providers and state governments.”
According to the EIA’s 2009 Residential Energy Consumption Survey, a significant share of homes in the Midwest (8.1 percent) use propane as their primary energy source for space heating. Earlier this month, the EIA predicted that US households would spend 7 percent more this winter on propane as costs rose.
Weekly price data figures released last week show the average residential propane price has increased two cents a gallon in the week to October 17. Average propane rates are now 39 cents a gallon higher than the same period last year. Prices will vary across states depending on a wide variety of factors such as wholesale prices, infrastructure issues, and individual suppliers’ overhead costs.
Meanwhile, national propane inventories continue to build, despite the temperatures beginning to fall. Propane stocks added one million barrels in the last week, the EIA said on Thursday. There are now 58.9 million barrels of propane in storage – the equivalent of 59.2 days’ supply.
In contrast, a year ago there were 63.5 million barrels in storage – the equivalent of 59.5 days’ supply.
Propane stocks have been tracking below last year’s levels for months on the back of strong overseas demand for US propane exports .