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Suburban Propane Partners, L.P. Message Board

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  • proxxxpain proxxxpain Jan 30, 2008 11:11 AM Flag

    House of pain W/ Suburban Propane

    where is CES and Region Oil. I see an awful lot of fuel oil jobbers breaking into the propane business the only way they can.......buying in with low prices. I don't see this changing. there is nothing the MLP's can do except wait until these new guys have a critical mass and have to start making money. This is usually 3-4 years from start up.

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    • I believe CES is out of Dingmans Falls, NJ or NY and HECO is out of Hackettstown, NJ. There may be others as well. As prices rise, customers become much more price sensitive. These new start-ups are taking advantage of the situation by offering extremely low entry levels prices. Even once they have to start making money, they may still be able to undercut Suburban because they're much more streamlined. To my knowedge, Suburban has exited the air conditioning service business. The result is customers are now going to HVAC companies for their A/C and heating service. What this does is minimize the value of Suburban's service departments and this no longer justifies the higher than average fuel prices being charged. Perhaps they will be exiting the heating service business as most other LP companies have done. I'd like to see them spin off their oil business before it dwindles further. BTW, I don't expect the CC to be very good.

      • 1 Reply to stock_superstar
      • thanks, you sound like you know the business. Not sure how these companies are starting up in NY and NJ. Permitting has to make putting a large 18 - 30K storage tank there impossible. Watch all these MLP's volume reports. This past year was colder than the year before yet all of them show lower volumes. It is getting much harder to reacquire all of the vol they lost due to their extreme pricing practices. Not many sizable acquisitions out there and to try to do it one small retailer at a time is almost impossible. Not sure what this means to their dividends but what do I know, I have been wondering how they do it for a couple of years now.

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