What Affects the Price of Propane in Wisconsin?


Quick Answer

Many factors influence the price of propane in Wisconsin; however, most relate to supply and demand. Propane, a byproduct of natural gas and petroleum production, is typically more expensive during the heating season and less expensive during the warmer months.

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Full Answer

In 2014, propane costs rose to almost $5 per gallon during the peak of the season. A major factors that influenced the cost spike was the conversion of the Cochin pipeline. Previously, the pipeline supplied 40 percent of Wisconsin's propane from Canada. However, during the 2014 season, the conversion of the pipeline changed its use to export other petroleum products to Canada.

Farmers use propane in drying agricultural products. A late or wet harvest decreases the available supply and increases the cost for the heating season. Propane use increases, along with prices, when the weather is unseasonably cool.

A strategy for dealing with the expense of heating with propane is purchasing in the summer when demand and prices drop. Just months after the 2014 high price, individuals using propane were able to refill their tanks at below $2 per gallon. State officials encourage propane users to fill tanks when supplies are less expensive. Some distributors also offer contracts that guarantee the propane user a set price for the entire heating season. Usually, consumers who sign the contract early receive the best price.

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