Propane prices in Washington will continue to soar through summer. Here’s why
Carlos Hernandez, who has been in the propane industry for over 20 years, said he has never experienced a year that has been as unsteady as 2021.
“It’s been crazy,” said Hernandez, 49. “This year is so unstable that every day you gotta be on top of it.”
Hernandez owns Peninsula Propane, a Tacoma-based business that offers residential and commercial propane services to the Puget Sound area. Peninsula Propane is just one of the many providers in the nation that has seen an increase in prices.
The average price of residential propane cost $2.30 per gallon as of March 29, according to the Energy Information Administration. That is about 43 cents higher than last year’s average.
This past winter — Oct. 1 to March 31 — the average price of residential propane increased by more than 52 cents per gallon, or 30 percent, according to the EIA. Prices grew due to an increase in crude oil prices, as well as global demand for propane.
Although the COVID-19 pandemic put a halt to a lot of things in 2020, propane exported from the United States increased by 13 percent, according to the EIA. Most of the exports supplied regions in Asia like China, Japan and South Korea.
Countries in East Asia needed propane to manufacture personal protective equipment, according to the EIA. Propane was also needed to heat spaces due to the effects of La Niña, a climate phenomenon that makes winter colder in certain parts of the world.
The Wall Street Journal reported grilling season during the summertime is not the reason why prices have risen — U.S. propane exports and people heating outdoor areas during the pandemic depleted propane inventories.
Propane prices will continue to increase as the country continues to export propane, Hernandez said. He still gets propane from a refinery in Anacortes but has not been getting any from the Port of Tacoma because it is “always running out,” he said.
“This is a very hard field to be in right now because usually the summertime (has) the lowest (prices),” Hernandez said. “Now the price is increasing like winter prices. It’s insane.”
Last summer, customers would pay around 60 cents per gallon, Hernandez said. This summer, customers pay around $1.31 per gallon plus shipping charges. Most big-time propane companies would charge over $2 per gallon, he said.
Last winter, a gallon of propane cost $1.60, Hernandez said. As most of the country’s propane was exported overseas, refineries were also sending propane to the South when Texas was hit by a devastating storm earlier this year, he said.
“They would chip in everything over there instead of leaving everything in the (West) for us to buy, so the refineries called it a shortage,” Hernandez said.
The cost per gallon depends on factors like demand and weather conditions, Hernadez said. For Peninsula Propane, the cost per gallon is usually cheaper after July 4 and before winter starts. But that is not the case for this year, he said.
“It’s hard to predict right now what’s going to happen,” Hernandez said.
This story was originally published July 10, 2021 at 5:00 AM.
