Propane - Page 2 - Fiberglass RV


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Old 01-30-2014, 02:41 PM   #15
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In the situation you described, you chose to participate in speculative pricing, essentially shifting the risk from the supplier to the consumer, you in this case. As I stated earlier, not all consumer purchases of propane are this volatile. The price we pay for propane as a group is determined once a year when the agreement is made. The leverage we obviously have is the amount of propane involved. Suppliers (several of them) have consistently sought our business and the difference in the cost between our price and average individual consumer pricing has been around $2.00 a gallon at its peak.
A group buy should expect to have some savings, as you are after all doing exactly what i was doing and speculating on the market price (all be on a longer term) & buying in bulk (except on a much smaller scale). By locking in a price you are in fact speculating that the price you agreed to is better than what it will be in the future. It is possible for all fairly large consumers of fuel products to negotiate a locked in a price for a set period of time whether they be a private party or a public corp. either way though what the index is at the time of the price negations and what the markets current trend forecast are will dictate what the rate is the supplier agrees to in the end. Only difference is most major fuel brokers/suppliers are reluctant to lock in with larger volume customer such as my company and most larger scale purchasers are equally as reluctant to lock the price in beyond 90 days (which is the longest most will do it) as historically over a few years that doesn't work in their favour. Works well for at a smaller level of end user/consumers though as there is no gamble as to what the index is going to do on a day to day bases and makes balancing the budget less stressful. The profit and lose margin for either side at that scale isn't as big as it would be with a *much* larger contract/volume of fuel. Easier for both sides to live with should the market take a wild swing one way or the other.

Here a homeowner can sign up for a year of set pricing for their natural gas supply through a number of different brokerage type firms as well, again though for most that has not proven over the course of a year or two of ups and downs in pricing to be an advantage. But then again may homeowners prefer having one set price to pay rather than speculating on their bill going or down each month.
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Old 01-30-2014, 03:19 PM   #16
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Carol H,
We are not speculating and not buying in bulk. As stated before, there is no contract with a supplier and we are not obligated to purchase any amount of propane from them. The only agreement or maybe better put, an understanding, is that the supplier will sell us the propane for a specified amount. Individuals from the group are free to purchase from whomever they want. Granted, the supplier could stop honoring the deal at any time but that hasn't happened in all the years this has been going on. I've had this discussion with others outside of our community and they've expressed interest in setting up something similar but haven't been able to gain any traction either because of a lack of community interest or limited numbers in the potential group.
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Old 01-30-2014, 07:54 PM   #17
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We just had propane delivered in NW Ontario.. Same price as we paid in October..... 0.779 per litre Cdn dollars.. Our price has always been set in September for the year.. I was wondering if that would hold true after all the letters to the editor for automotive propane going up but no worries
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Old 01-30-2014, 09:40 PM   #18
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One person making a small purchase will always pay more. A whole bunch of people ganging to make a purchase (one year or so in advance) will typically pay far less. No matter what the supply/demand is. The company I work for pays MILLIONS for diesel fuel a year... what do you think we do? Speculate, write contracts and hope for the best. One person buying retail shouldn't complain... y'all are competing for supply when supply is at it's lowest...
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Old 01-30-2014, 10:33 PM   #19
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The colder than usual weather has caused a spike in LP usage. Here in OK, Gov. Fallin ordered a temporary easing of driver restrictions so as to allow more LP to be trucked into and around the state more quickly. And yes, the price is up. I have 40 lbs (2 20 lb tanks full) I can sell you if you get too low, Carl...
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Old 01-30-2014, 11:12 PM   #20
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The colder than usual weather has caused a spike in LP usage. Here in OK, Gov. Fallin ordered a temporary easing of driver restrictions so as to allow more LP to be trucked into and around the state more quickly. And yes, the price is up. I have 40 lbs (2 20 lb tanks full) I can sell you if you get too low, Carl...
LOL............don't tell anyone but I have another thousand gallon
tank out behind the church. I could have them pump it out of that
one and put it in to the one behind the house.
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Old 01-30-2014, 11:18 PM   #21
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Originally Posted by Donna D. View Post
One person making a small purchase will always pay more. A whole bunch of people ganging to make a purchase (one year or so in advance) will typically pay far less. No matter what the supply/demand is. The company I work for pays MILLIONS for diesel fuel a year... what do you think we do? Speculate, write contracts and hope for the best. One person buying retail shouldn't complain... y'all are competing for supply when supply is at it's lowest...
You nailed it. I'm still amazed at the power of our measly 75,000 - 100,000 gallon commitment or nod in a supplier's direction. I'm even more amazed that some of my neighbors don't participate in the arrangement and continue to pay higher prices.
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Old 01-30-2014, 11:29 PM   #22
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I've been offered a pre purchase discount before.
I just work out a deal for better pricing on 2 thousand
gallon tanks. So far, I've gotten through each winter.

But this next round I will probably fill both tanks and then
pay their 10% down on a pre purchase and just fill up
earlier if I don't need 2 full tanks later. That way I can
maintain the purchase price a bit longer..........LOL
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Old 01-31-2014, 12:01 AM   #23
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I donno. At the pace they are discovering and tapping natural gas in the U.S. and Canada, you may find you've paid too much.
BC government opened up the market for natural gas a few years ago, allowing more companies to sell it to home owners. It was their "private enterprise" initiative. It was the same gas, coming from the same source, traveling through the same pipes, but with a middle man that offered contracts.
A lot of people bought into it, due to some shameful marketing practices by the new companies, and because they thought they had been ripped off in the past.
Price of natural gas fell, due to new discoveries and more efficient practices.
These same people who went into long-term contracts, because they believe in private enterprise, were soon begging the government to get them out of the contracts.
I told more than one salesman to get lost, paid the prevailing rate for the gas ( which went up and down ) and saved a lot of money.
The gas company here, BTW, only delivers the gas. They pay the market rate for it and pass it along.
Never could figure out how a bunch of executives with big salaries could sell me gas cheaper when they had to buy it on the world market and deliver it to me through the same lines. But, some people, with tears in their eyes, are smarter than me.
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Old 01-31-2014, 08:40 AM   #24
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I donno. At the pace they are discovering and tapping natural gas in the U.S. and Canada, you may find you've paid too much.
BC government opened up the market for natural gas a few years ago, allowing more companies to sell it to home owners. It was their "private enterprise" initiative. It was the same gas, coming from the same source, traveling through the same pipes, but with a middle man that offered contracts.
A lot of people bought into it, due to some shameful marketing practices by the new companies, and because they thought they had been ripped off in the past.
Price of natural gas fell, due to new discoveries and more efficient practices.
These same people who went into long-term contracts, because they believe in private enterprise, were soon begging the government to get them out of the contracts.
I told more than one salesman to get lost, paid the prevailing rate for the gas ( which went up and down ) and saved a lot of money.
The gas company here, BTW, only delivers the gas. They pay the market rate for it and pass it along.
Never could figure out how a bunch of executives with big salaries could sell me gas cheaper when they had to buy it on the world market and deliver it to me through the same lines. But, some people, with tears in their eyes, are smarter than me.
I think that's the reason why our group does not enter into any contracts. We'll go along with the supplier's pricing for a year (if individuals decide to purchase) and then go through the bidding process again next year or whenever it suits us.
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Old 02-06-2014, 12:54 PM   #25
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Yesterday, we had a home delivery of propane. Fill up was just under 300 gallons and price was $2.97/gallon. Texas may not have the shortage that others are dealing with. Our prices seem to follow the price of gasoline.
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Old 02-06-2014, 03:18 PM   #26
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We volunteer with a group on the Pine Ridge Indian Reservation in South Dakota and I know that they have been having a terrible winter due to the cold and snow. Those homes that do have propane tanks are not able to have them filled due to high prices, so every piece of wood that's available is being burned.

We heat with natural gas in our 1800 sq. ft. home and just received our latest bill that covers January. This bill is the highest ever in our 8 years in Oak Park due to the extreme cold during the month. We hit $252 for gas in January and the electric bill was $125 (we run too many electric things concurrently but we depend on multiple technology devices due to our jobs). I just thought I'd mention this as a comparison to LP prices.
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Old 02-06-2014, 03:31 PM   #27
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All I can say, we ain't seen nothing yet.
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