Propane Pricing Tips
It is very important to conduct your own propane pricing research on a regular basis to ensure that your price is competitive. If you are not participating in a supplier pre-buy or price-cap program and your suppliers daily propane prices for customers with a leased propane tank are not publicly posted, consider the following methods of propane pricing research:
(1) Check to make sure your propane supplier is clearly printing your exact propane price per gallon on each delivery ticket. If these documents fail to show your propane price per gallon, contact your supplier and request that your propane price per gallon be included on future delivery tickets (in some areas, this is state law). Your propane price per gallon information from your current supplier is absolutely critical for your propane pricing research. Without being aware of your propane price per gallon, you will be unable to compare propane prices offered by other suppliers in your area.
Many propane companies declare that they offer "competitive propane prices", yet they fail to provide proof by showing their current propane prices on their website or through another public display. A company that merely states that they offer "competitive propane prices", without proof, should not be enough for you to rest assured that your supplier charges competitive propane prices. To protect yourself from overpaying, you must take control of the matter by demanding that your propane supplier communicate your current propane price per gallon before each delivery (current propane pricing on company website, fax, voice-mail or e-mail, etc.) for comparison with your other local propane suppliers. If you wait until after your delivery to compare your suppliers propane pricing, you may find it very difficult, if not impossible, to find out what the other local propane suppliers were charging on the date that your supplier made a recent delivery without disclosing the propane price per gallon prior to the delivery.
(2) Call your current supplier once or twice per month, especially during the winter heating months, and anonymously inquire about their daily propane price per gallon. Make sure the quoted price is the standard daily propane price per gallon rather than a new customer reduced propane price per gallon. Anonymous pricing inquiries will ensure that your supplier quotes unbiased pricing information applicable to all customers using a specific volume of propane each year.
When making an anonymous price inquiry, you should only provide your annual propane gallons, tank size, confirmation that the tank is leased and your zip code. If your supplier requests additional personal identifying information (i.e. your name, physical address or telephone number) inform them that you prefer not to disclose that information as you are interested in obtaining a true unbiased current propane price per gallon quote. Your goal is to monitor your propane price per gallon to make sure it is consistently competitive. For example, if your anonymous propane price quote is $2.10 per gallon, and you have a delivery ticket from the day before showing $5.90 per gallon, you should immediately contact your propane supplier for an explanation.
Complete your research by contacting other suppliers in your area and inquire about their daily price per gallon at the same time. Ask for both the current customer and new customer pricing information for a customer that purchases your approximate propane volume each year. Note prices for both purchased and leased tanks. Is my prebuy contract really saving me money each year? Are my many years of supplier customer loyalty being rewarded with attractive pricing that reflects a long-term loyal customer? Will a price cap program save me money? Bottom Line: Only propane pricing research will answer these questions. Keep your research information organized in a file for comparison purposes in the future.
(3) After receiving a propane delivery, contact other suppliers to compare their price per gallon with the price per gallon that appears on your supplier's recent delivery ticket. When contacting your current propane supplier, or competing suppliers, to discover current propane prices, keep in mind that quoting current propane prices should be a very simple and quick process. If your call is put on hold several times, transfered to one or more people in the office, or the supplier asks you "How does this price sound?", these may be reasons for concern. You should be quoted a straight forward price per gallon immediately and move on to your next propane price comparison call. Keep a record of the propane price per gallon information by supplier and the date to review periodically.
(4) When viewing the Federal Government EIA Propane Pricing Data or CheckPropanePrices.com, it is important to pay close attention to the directional trend of propane prices, rather than the exact national average propane price per gallon. If the national propane pricing average is increasing or decreasing during the past few weeks, compare the direction of your suppliers propane prices during the same time period. The directional pricing movement will not be identical; however, your suppliers propane prices should follow the same general direction.
Since propane prices typically follow a pattern of increasing while entering winter heating season and decreasing while exiting the winter heating season, it is very important to monitor the Federal Government EIA survey of propane prices and conduct periodic local propane supplier price surveys during these specific time intervals. You want to make sure that your propane supplier is responding to lower wholesale prices by sharing the benefit of lower wholesale prices with their customers through lower home delivery prices rather than leaving customer home delivery propane prices at a higher level while the wholesale propane prices may be rapidly decreasing. As noted earlier, since most propane suppliers choose not to publicly post their propane prices for customer comparison, it is critical that you conduct your own local supplier survey of propane prices and/or consider participating in an e-mail group with other propane consumers in your area to share and monitor the propane prices offered by various local propane suppliers to ensure that your home delivered propane price is consistently competitive.
(5) Be cautious when a supplier offers a "special program offer" that includes a "discount of 2 cents off our regular price" or a "discount of 5 cents off our regular price", especially if the propane supplier's prices are NOT publicly posted. The supplier should validate the "special discount offer" by publicly posting both the original price per gallon and the reduced price per gallon after the discount. This will give you the opportunity to clearly verify the "regular" and "discount" prices.
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