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What are some factors that affect prices of propane in Minnesota?

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Quick Answer

Some factors that affect prices of propane in Minnesota include the declining supply from Alberta oil sands in Canada, railroad congestion and declining use of pipeline transportation, as of 2015. According to Fox9.com, other factors include increased demand from corn farmers and poor weather.

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What are some factors that affect prices of propane in Minnesota?
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Full Answer

As of 2015, the prices of propane in Minnesota have been affected by declining supply from Canada due to closure of the Cochlin pipeline for installation of newer pumps. This creates propane shortages, as the new pumps only carry light condensate petroleum products. According to Fox9.com, propane supplies have bulked on storage and moved to rail lines instead of the pipeline.

Propane prices in Minnesota are affected by railroad congestion. The railways are clogged with trains, leaving little room for propane. There is a limited number of railroad crews, cars and trains in the system. Prices are also affected by low supply due to the limited movement of truck drivers because of emergency declarations limiting them to 11 driving hours and 14 working hours in the state.

Increased demand for propane by corn farmers also affects prices in Minnesota. Corn farmers require large propane-powered equipment to dry wet crops for storage. According Fox9.com, propane prices can be affected by poor weather conditions. Late winter and increased cold conditions increase propane consumption, lowering the local supply. Snow conditions in the state hinder transportation of propane by truck drivers.

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