From October 2014 to March 2015, the average cost of propane in the United States ranged from around $2.30 to $2.40 per gallon. The cost of propane continually fluctuates due to a variety of different factors, including supply, demand, the proximity to a major supply area and the price of oil and natural gas.
This price was approximately $1.40 cheaper than the previous year, where propane prices spiked due to an increased demand brought on by severe cold and transportation issues that affected the available supply.
The two major propane producing areas in the United States are the Gulf Coast and the Midwest. Customers in these areas generally pay lower prices for propane, and the prices tend to be higher in areas that are the furthest away. This is mainly due to the increased costs of transporting the propane across these distances.
The prices of oil and natural gas also affect the cost of propane, as it is produced from either natural gas processing or crude oil refining. Although it can be produced from either oil or natural gas, the price of crude oil normally has a greater influence on the price of propane. This is because propane normally competes with other crude-oil-based fuels.
As many homes in the United States use propane for heating, the price of propane is generally quite a bit higher during the winter months than it is in the summer.