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National shortages lead to propane gas price hike

Monday, Jan. 27, 2014 2:29 PM
Last updated 8:37 PM
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Despite a winter in which temperatures in Augusta reached a new record low, natural gas providers say prices to heat homes remain relatively stable.

If only the same could be said for propane.

“We have been able to get all we need, but the price has gone through the roof and it is not a local issue, it is a national problem,” said Virginia Lippert, owner of Dixie Liquid Petroleum Gas of Augusta on Washington Road.

Lippert’s staff said prices have jumped to $4.29 a gallon from $2.79 a week ago because of shortages in the Midwest that have forced 24 states to declare energy emergencies.

The order loosens transportation rules to allow out-of-state truckers to drive longer hours to make needed deliveries, but Lippert said it has also resulted in people calling and visiting her office nonstop to get tanks refilled.

Despite new rates being faxed in every few hours, Lippert said there is no need to panic and that her customers, even those on fixed incomes, are choosing to ride out the increase.

“I have been here 50 years and seen shortages and droughts, but this is the highest price we have ever charged and the highest cost we have ever paid for propane,” Lippert said. “This is just unheard of.”

There is good news for some area customers.

Georgia Natural Gas reported last week that it has not seen any recent increase in late bills or requests for payment arrangements, and that prices are “still relatively low” compared to 2006, when natural gas cost homeowners $1.80 per therm.

“Still no changes in the marketplace,” Lewis said of Georgia Natural Gas prices.

In Novemeber, Lewis reported prices as low as 52 cents per therm.

SCANA Energy officials said its commodity price of natural gas has increased 27 percent since the first of the month. Augusta set a new record low Jan. 7 when temperatures dropped to 12 degrees, and another blast of cold air, and possibly snow, is forecast Tuesday.

“We have seen some upward movement in the commodity price of natural gas, however in our state’s deregulated natural gas market, we have fixed rate plans that protect against price spikes,” said Simone McKinney, spokeswoman for SCANA Energy, which in Georgia has 460,000 customers. “The majority of our customers are on fixed rate plans and if they’re locked in through the winter, they won’t be impacted by any price increases. Our variable customers have rates that are in effect until Feb. 5.”

NATRUAL GAS ON THE MOVE

Demand levels in the Southeast have spiked this winter, with days in which outside temperatures drop to the point buildings require heat increasing 40 percent, from 59 days last year compared to 142 this year, according to the National Oceanic and Atmospheric Administration.

As a result, the Energy Information Administration reported last week that total natural gas consumption has increased 19 percent, largely in the residential and commercial sectors.

The rise in demand has February’s advanced delivery of natural gas up as much as 5 percent to more than $5 per million thermal units on the New York Mercantile Exchange. The contract jumped 20 percent last week, the most since October 2010.

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resident
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resident 01/28/14 - 01:11 pm
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Price Fixing

You see the media sensationalizing this so called shortage. As we can see some comes from Government regulatory decisions. I believe some of it really comes from the producers of this item...a byproduct of the refining process of any petroleum based product. They burn this stuff off at refineries. I believe this is just media hype driving panic and also government errors. There is no real shortage.

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