Skyrocketing propane prices have left customers and suppliers out in the cold.
Nick Brouwer, manager of Chalmers Fuels in Teviotdale, said the price per litre has gone from 57.9 cents to $1.09 within the past year and he doesn’t foresee price relief in the near future.
“It’s supply and demand,” he told the Advertiser in a telephone interview about the current supply shortage of propane.
According to Brouwer much of the shortage is weather-related in the U.S. and now in Canada. Crop drying south of the border is done using propane and with wet weather coinciding with crop drying season last fall, large of amounts of propane were consumed.
“Consumption was very high,” said Brouwer.
The rash of extended cold weather here also put demand on the already low supply. Brouwer said although most of the propane supply is refined in the U.S. and with a refinery in Sarnia, supplies are designated for the total North American market and not split between Canada and the U.S.
“We do have a lot of domestic supply,” he added. “It’s integrated so we share the supply. When there’s a huge demand for supply they can’t just turn on a tap.”
The price has also been compounded when suppliers added on the federally-regulated HST of 13 per cent – an increase from the former 5% tax.
In addition, heavy snowfalls over an extended period have made it difficult, at times, to deliver propane to customers.
Brouwer realizes the difficulties the price spike has caused for the company’s 3,500 propane customers, but he admits there is little suppliers can do. “All you can do is conserve,” Brouwer suggested.
He said it can help to turn down the thermostat, close vents in rooms not in use, and turn down the temperature on hot water heaters.
“It’s hard on us as well,” said Brouwer. “We’re not making more money with higher prices.” Brouwer would not speculate on when prices may begin to drop.
A News release from Superior Propane, a large supplier with an outlet in Guelph-Eramosa Township, predicted it could be May before prices start to ease.
“Traditionally prices have softened in the spring when winter heating demand eases,” the company said. “Superior currently expects prices to ease at the end of April or early May.”
