Propane prices fluctuate rapidly amidst shortage

G A Propane owner Ron Atkinson said the propane shortage could be resolved in two weeks, or it could be a lot longer.

With the current national propane inventory at half of what it was last year, prices have been fluctuating rapidly amidst a national propane shortage, leaving people who use propane to heat their homes hanging in the balance.

Ron Atkinson, owner of G A Propane in Kingdom City, explained that the shortage is caused by three main factors:

- A large, late grain drying season on the national level, requiring twice the amount of propane as normal;

- As the grain drying season ended, an exceptionally cold winter began. There was no time for the gas industry to recapture inventories before the cold weather hit;

- A significant amount of the national inventory was exported to other countries, the bulk of which came out of the midwest inventory.

Atkinson said to conserve his propane inventory and keep prices low, his company has been rationing gas in 200 gallon-max deliveries. Although the tanks his company fills are not full, he said they will replenish them more frequently.

"I guarantee you we won't have a profitable year," Atkinson said. "Unless things change quickly, we're going to have to make two to three times the trips to do what we'd normally do in one, to try and conserve costs for our customers."

So far, none of Atkinson's customers have run out of propane.

However, others in mid-Missouri have complained of extremely high prices. Callaway County resident Josh Stevens said he ended up having to pay $900 for 200 gallons. "I needed to fill my tank up, and my propane company basically told me it was going to be double what it usually is," Stevens said. "They told me I could wait but prices might go up, that's what they were hearing."

The price of propane changed five times Wednesday. Atkinson said it normally changes only once. Since small distributors are second to last in the supply chain, Atkinson has had to keep an eye on gas prices practically all the time in order to buy small amounts at the best price.

Atkinson said he believes prices are up right now to discourage suppliers from buying large amounts of it, so that refineries and others higher up in the production chain have enough time to produce enough propane to replenish the supply. Once that happens, Atkinson said he believes supplies and prices will stabilize.

However, Atkinson said much of it depends on the weather. In a "happy ending" scenario, propane inventories will be replenished in two weeks.

A state senator recently said he is calling on the attorney general to investigate the spike in prices.

If the cold weather persists, however, Atkinson said he believes it will be even longer.