Ok folks and APU investors, I happen to be a long time heavy use resident customer of Amerigas - but that's my only "vested" interest in the following questions....
Simple question then, what's the REAL reason for high current propane prices? Here's why I ask:
1. Current inventories of propane are now HIGHER by 3.2% from where they were this time last year. Repeat HIGHER. So where's the crisis?
2. While I'm at it, how come average residential retail prices vary so dramatically from state to state. (even as the wholesale prices are actually very similar) For example, the average midwest retail price is only 177.4 cents per gallon (and 153.3 in frigid South Dakota), but here in Vuh-GIN-yah, we're being soaked an average of 231 cents per gallon. (and Amerigas customers are paying significantly more than that - my current bill is at 258 cents per gallon!!!)
So what's going on? Is this a case of Amerigas charging in each area what it can get away with? (e.g., thanks to the rigor of the local media in each market) Do local and state taxes play a role? (If so, how much?)
And back to my first question, why EXACTLY are current propane prices higher than last year's - despite the inventory picture being BETTER than last year at this time?
Thanks in advance for any serious answers.
BTW, all my stats cited above come from EIA figures and links.... (e.g. from Bush's buddies)
Don't delay - call their local office and raise heck. Indicate that you have done your homework as you have shown. Even at current laid-in cost at their plant, they are taking advantage of you for a dollar or more a gallon in gross profit. You, my friend, are considered the ideal customer among propane companies - a residential user of a 1,000+ gallons a year. You have bargaining power, so use it. This will likely result in your price being lowered. If you really want to make them sweat, ask them how much credit $ they plan to give you based on the past few deliveries - kind of a reverse pre-buy.
If I lived in Virginia I would seriously consider an add-on heat pump for my gas furnace. The heat pump provides heat down to 20 degrees or so and the gas furnace takes over at colder temperatures. If you already have air conditioning the installation is easy for any heating contractor. Your electric utility may have special winter heating rates. At $2.58 a gallon you can't lose. In the St. Louis area people with this setup heat their homes for 1/3 the cost of propane at $1.65 a gallon.
You didn't state your yearly usage, number of gallons used per year. This can make a difference in your price per gallon. Also, why did you not take advantage of AmeriGas' prebuy program? We try to get all our customers to take advantage of this money saving program. You mentioned you are a heavy use customer and if that is true your price should be much lower I would think. Competition is the main reason I would think prices vary from state to state. There are several cooperatives in the midwest I think that sell propane at a much lower price than the majors and that drives the price down. We try to overcome that with a competitive price and hopefully better service, something some folks want. As far as the wholesale price being high, ask congress, they just raked the oil execs over the coals to find out why. Or to appease the voters, you choose which.