Are LP Gas Prices Eating At Your Wallet?

Propane or liquefied petroleum gas (LPG) may be a more cost-effective option for your household than electricity. In fact, the Department of Energy states that you can save around 30 percent each year when you use LP gas to heat your water or save up to 50 percent if you use it instead of an electric dryer for clothes. However, certain factors could make you spend more than what you should be for residential LP gas. When determining your expenses it is important to examine the factors that are likely to affect LP gas prices. Variables like global crude oil and natural gas prices, the climate, and the season are uncontrollable, but factors like your LP gas provider and its services and fees must be examined to verify if LP gas prices are eating at your wallet.

Propane retailers can include or exclude certain services in their LP gas prices. The most common services you are likely to see in the breakdown of prices are the fixed prices for a given amount of time (usually a year), automatic delivery, and the budget payment plan, which is designed to prevent you from paying all at once to refill your propane tank for an entire year. These factors could make LP gas prices vary significantly from one supplier to another. If the propane provider automatically delivers to you, but you order only when the level reaches 20 to 30 percent, ask what the provider charges per gallon for the delivery and compare the rate with national or state averages to determine if it is reasonable.

Consider asking for the fees and charges that your LP gas company is charging you. Some companies may include regulatory fees to cover their compliance with local, state, and federal regulations on the handling, delivery, and transportation of propane. Tank rent applies if you are leasing a propane tank. You should consider the time of the year when you would usually have propane delivered, too. LP gas prices are typically higher in the colder months or in winter, so some households will stock up on propane in the summer in preparation for heating in those months.