Winter is coming and that means you’ll need to turn on the heat. That also might mean higher propane bills.
Each winter, the price of propane weighs on the mind of propane users. How much it cost to heat your home with propane this winter? Unfortunately, the answer is “it depends.” But it will help you plan your budget if you know what to look forward to with propane pricing.
First: The price of propane is increasing
Had you already noticed an increase in the price of propane? That’s not a surprise. With crude oil selling at a whopping $70 a barrel, the costs of propane must increase, too.
Be prepared for your bill to increase even more in the coming winter months when usage peaks. Yet, there are some ways you can avoid surprise price hikes and keep your propane bill reasonable.
Let’s look at some facts about the rising costs of propane and what you can do to cut the effects at home.
What is the Current Price of Propane?
Unfortunately, there is no clear answer here.
The price of propane fluctuates with the market, sometimes as much as $0.20 per gallon or more in a month. It also varies by propane provider. Some big-name, national propane providers have been known to inflate the cost of propane by including different line items on the bill, like “delivery charge”, etc.
Others, like Kauffman Gas, will provide a price that is truer to market.
Right now, the national average market price ranges from $2.00 to $2.40/gallon.
According to a report by the U.S. Energy Information Administration, expect those costs to continue to rise this winter.
Why Is the Price of Propane Increasing?
In short: propane wholesale prices are increasing
Wholesale prices have gone up approximately $.30 from September of 2017 to present. Customers can expect a $.30-$40 increase year over year.
This is caused by an increase in the cost of crude oil. The cost of crude oil and propane are tied together. Why? Because propane is a byproduct of processing crude oil.
When crude oil costs more, so does propane.
Supply and Demand Drive Increases
Demand for propane will remain high. It could be higher with this year’s colder than normal winter weather predictions. The limited supply may not be able to keep up. So, the price per gallon will continue to increase with the high demand for propane.
How Can I Keep My Bill In Check?
That all sounds terrible to the homeowner who’s trying to budget for propane costs. But, even though prices will rise, there are some things you can do to keep your propane costs manageable.
Check out these options for managing your propane bill during price hikes.
Choose the Right Payment Plan
Predictable propane bills keep you on budget. Some payment options even offer discounted pricing. Here are a few ways you can pay your propane bill each month.
1. Prepaid Plan
You can pre-purchase your propane at a fixed rate. Sometimes, you get a rate discount for being on a prepaid plan.
Another advantage is that you are paying the current price for propane. You’ll avoid future rate hikes with a prepaid plan.
This option requires you to pay in advance, but the savings over time can be great.
2. Budget Plan
The budget plan spreads your annual cost of propane out over 12 months. It requires an estimate of annual usage and sets the monthly cost at a fixed amount.
With this plan, you know how much your bill will be each month. It keeps your budget predictable and stable.
Keep in mind that estimates are that, estimates. You’ll need to keep track of your usage to stay on plan. If you exceed your estimate, you’ll have to pay for the extra propane you use.
3. Fixed Pricing Plan
You can buy a fixed pricing plan to ensure that your prices do not spike. A fixed plan sets your pricing at a guaranteed rate. This can help keep your budget predictable during price hikes.
You may have to pay a fee up front, but it can save you money in the long run.
4. Rate Caps
This type of plan may not have as good a rate as the fixed rate plan, but it can still save you during rate hikes. It sets your rate at a capped amount. Even when prices spike above it, your prices will remain at the capped rate.
You’ll pay a fee to set the rate cap, but it may be worth it.
Manage Your Usage
The greatest way to affect your propane bill each month is to manage your usage. Make heating choices that keep your propane use in check. Here are some good ideas for making your propane stretch.
- Bundle up with blankets instead of turning up the heat
- Keep your doors shut during the coldest part of the day
- Close vents and doors in rooms you don’t use
- Program your thermostat for lower usage while you’re not home
- Take short showers to reduce hot water heating
Using propane wisely will keep your bill lower even when prices increase.
Winterize Your Home
Make your home as energy efficient as possible before winter! If your home retains heat efficiently, then you’ll use less propane. The better use of your propane, the less you’ll pay.
Here are some ways to make sure your home is ready for winter efficiency.
- Seal drafts between windows and doors
- Replace old windows with double-paned options
- Replace old insulation with newer, more efficient materials
- Change out filters in the furnace
- Service your central heating system
- Check your water heater efficiency
Look for any way to help your home keep its heat indoors to reduce your propane bill.
Prepare for Increase Propane Pricing Now
Don’t wait for your first winter bill to come to do something about it. Check out your payment plan and prepare your house for the increased price of propane, now. You’ll be glad you did.
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