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Propane price surges in Sauk Valley

Distributors deal with limited supplies

Published: Thursday, Jan. 23, 2014 1:15 a.m. CDT
Caption
(Philip Marruffo/pmarruffo@saukvalley.com)
Propane tanks sit in the blowing snow Wednesday afternoon outside of Tampico. In recent days, the per-gallon price for propane has nearly doubled to more than $3.60 in the Sauk Valley.

With demand for propane surging, its price is skyrocketing. And less of it is available for customers.

In recent days, the per-gallon price for propane has nearly doubled to more than $3.60 in the Sauk Valley. And with cold temperatures continuing, experts expect the trend to continue.

Mike Faivre, president of Polo-based Burkardt's LP Gas, said his company usually gets its propane from pipelines in Tampico and Rockford. But companies are allocated only so much now, because of limited supplies.

During the winter, he said, his company typically gets three to five semi-truck loads a day. Now, it's lucky to just get one. 

"We're short-filling people, limiting the amount of gallons they get," Faivre said, adding, "Our customers are being taken care of." 

How much they get, he said, depends on their usage, but the rule of thumb is that the company gives enough to get a customer by for a month. Because the company is giving limited amounts to customers, it's making twice as many deliveries, he said. 

"We've been working 14 to 15 hours a day for the last month, 6 days a week. That's what we've had to do to keep up with the cold weather," Faivre said. "We've been in business for 32 years, and it's never been like this."

All of Burkardt's customers have their prices locked in because of pre-winter agreements, so the price spike won't affect them, Faivre said. 

Experts say the cold winter, combined with a wet fall, has caused propane supplies to drop. The Associated Press reports that some propane distributors have traveled as far as Mississippi and Kansas to keep up with demand.

Steve Michlig of Manlius-based Michlig Energy said he has heard about distributors going out of state for propane, but his company hasn't had to do that yet. 

"We pull a lot from Tampico. We don't have all our eggs in one basket," he said. "Right now, everything is on allocation. You can only pull so many loads. We have enough loads allocated for us for the rest of the month."

So far, Michlig said, his company hasn't limited customers' allocations.

"We really worked hard at the beginning of the month to make sure [customers' tanks] were topped off," he said. "It could start happening where we'll have to ration a little bit. We're not at that point yet. I'm hoping like heck that we'll get warm weather soon."

About one-third of Michlig's customers have their price locked in for the winter. 

"There will not be a lot of people who want to buy propane above $3. It's horrible for consumers," Michlig said. "They didn't plan on something like this happening, and neither did we."

 

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