Frequently Asked Questions For Propane
Pricing
When
you purchase propane, will you pay the same price everywhere?
No.
Since the government doesn't regulate propane pricing, the propane venders themselves
set prices based on their own overhead and profit goals. Propane prices are also
affected by a variety of factors that can significantly change the cost of propane
such as where you buy it, what season you're in, and middle men involved (including
government concepts like hazmat).
Owning
your own propane tank vs. renting one from the vender will also affect the price
of your propane purchase. You should be careful to note that finding a better
price, even by a few cents is essential because over a years time that difference
in price will add up significantly.
Should
I take a proactive stance in staying informed about propane pricing?
Of
course! When you think about it, not paying attention to the price of your propane
could not only leave you vulnerable to being cheated, but you will not be able
to take advantage of a lower priced propane company if you're not aware. You should
consider the price of your propane the same as purchasing gas for your car. Always
be on the lookout for a cheaper price, and realize that prices fluctuate all the
time. Never assume they don't.
Also,
never get so comfortable with the company you purchase your propane from that
you stop looking at the price because you may be paying a higher premium than
you have to! If your comfortable with a specific vender, keep an eye on prices
else where and bring it to their attention if the other venders price is better.
It doesn't hurt to try to bring their price down, especially if it means losing
your business to a competitor!
People
spend thousands of dollars on propane to heat their home, and with proactive attention
to pricing you can actually, with little effort, find lower prices all the time.
The propane companies are always competing and often will lower prices to out
bid their competition to gain your business. If your purchasing a lot of propane
you should always try to work a deal with the vender for a lower price per gallon,
even let them know that if they can't come down to your price, you will take your
business to someone who will. Even shaving 50 cents off the price per gallon of
propane can mean $500 or more in savings.
Trying
to get a deal will cost you nothing, but not even trying may cost you $500.00
or more per year! In today's economy many companies are willing to bargain, if
anyone told you they won't, they probably assumed this and didn't even try! They
will sometimes stay rigid, but sometimes they will work with you, especially if
you're going to be a regular customer who will be buying a lot of propane on a
continuing basis. Another option is to join or form a buyers group.
What
if the propane company won't tell me the price per gallon rate?
If
a propane company is unwilling to share their propane prices before delivery or
they tell you they can't give you a price because their prices change "frequently"
then either don't buy from them, or argue the point that gas stations prices change
daily and yet they still have signs up and updated daily with the price displayed.
You wouldn't purchase gas for your car without knowing the price, so don't purchase
propane from a company that won't tell you their price in advance or on their
website. If you can't compare prices you may find that you're paying hundreds,
maybe thousands of dollars more than you had to that year! A trusted company will
make it clear how much you're paying per gallon for your propane BEFORE delivery
and there should be no exceptions, unless you want to lose money.
The
best way to do this is to request that the vender fax you over the exact price
of your next automatic refill for propane 24-48 hours before delivery. Mention
that if they cannot supply you with a price before delivery or if they neglect
to send you this fax, that you will be sending the propane back and will deal
with a company that will. You will not be the first company wanting this information,
so if they refuse to do this then you should suspect and question why. The vender
will be much easier and responsive to your concerns and needs before your delivery
than after, so be punctual in making sure you get that fax or that you contact
them before the order is delivered to avoid headaches after the delivery. The
fax is getting it in writing, so don't let them deliver anything without getting
the price in writing.
Is
it a good idea to take new customer offers from propane suppliers?
Yes.
Propane companies are always thirsty for new business and commonly offer new customers
a deal to entice them to buy propane from them. This savings is optimal initially,
but be sure to read the fine print. Although new customer pricing is a good idea,
for you, it cost the company money so they will put a time limit on the pricing
so be sure to learn how long it will last and the price of your propane after
the introductory pricing offer. This goes along with always knowing how much your
propane is before delivery, never assume. Many people will get used to the introductory
pricing and forget its temporary, falling into the trap of paying more possibly,
after the introductory offer, than even their competitors every day price!
What
is the price impact of leasing vs. buying my propane tank from the vender?
If
you're a homeowner, and you use propane for heating your home, you often will
have the choice of leasing a propane tank that can be exchanged or refilled, or
purchasing one outright. The difference, however, is if you purchase your propane
tank you can purchase your propane from any vender, you simply refill your tank.
If you lease your tank you are locked into that one vender and this could cost
you more in the long run since even if you do find a lower price elsewhere you
can't get out of the lease or fill your tank up with the other vender due to your
contract. Initially it is more expensive to purchase your tank but in the long
run you will save money because you won't be locked in to one company that may
raise their prices above everyone else.
If
it is possible to lock in a good price and knowing this price ahead of time, you
may actually find leasing a better option. Again don't be afraid to barter, they
are in business and NEED you more than you need them. If a company only offers
a lease option and won't disclose their prices ahead of time, you should walk
away and find another vender that either has a purchase option or a fully disclosed
price policy (promises in writing to always tell you the price before delivery)
and the pricing is reasonable/competitive. You always take a risk with the leasing
option, but in the same breath, a company realizes if they screw you in any way
you will not purchase from them ever again.
Is it beneficial to purchase my
winter supply of propane in advance?
Pre-buying
your propane can mean getting a better price, especially when you consider that
purchasing propane in the winter is usually more expensive than purchasing it
in the summer, however there are no guarantees that this trend will sustain. Many
have purchased their propane in advance - summer months - only to be surprised
in 2008 when the trend changed and prices actually dropped in the winter to an
all time low. It really is not possible to predict with certainty, the prices
of propane.
Sometimes
it is a good idea and may save you money, it's a gamble that sometimes pays off,
and sometimes you find it would have been better to wait. In either scenario you
should consider the price and if it's worth it, even though the price may go below
the summer price. The people who found out that the summer 2008 prepay contracts
were actually higher priced than the winter prices that year, simply didn't save
more money, but this doesn't necessarily mean they lost money either as they still
got their propane at a better price than their normal winter price.
Considering
a price cap program, is it a good idea?
One
way of helping buyers control their winter propane bills is to offer them a price
cap program. Each supplier has a different program which may be significantly
different from any others, so it would be a good idea to get all the facts - do
your homework when considering this program. Keep in mind that many of these programs
have fees you should be aware of, as this works into the overall price and savings
of your propane purchases.
Are
fees a normal part of every propane suppliers price?
The
short answer is NO. Fees are often a way for the propane company to off set their
expenses and overhead, as well as government regulatory fees such as hazmat. There
are many things going on in the background that the propane companies deal with
(often so you don't have to), and just like any other business, they fracture
the cost of this overhead into the cost of the propane and delivery services.
Although many
propane suppliers charge fees, some that don't still do, you just don't see it
in plain English. Many propane suppliers work the fees and overhead into the per
gallon price of the propane for simplicity. Fees can, in either format, drastically
change the price of your propane, so it's best to do your homework and calculate
the price of your propane, any fees involved, and average the whole enchilada
into one price (i.e. consolidate it into a per gallon price) before you compare
prices across the board. This will give you a better estimate of which one is
cheaper.
Neither
way (fee outright or fee built in) is wrong or right, it's just a matter of book
keeping. Often times you will find the companies that build the fee into the price
are more expensive because they may have higher overhead than a company that breaks
the price down cheaper with added fees but consolidated it all comes down to one
price minus the other.
You
should always ask the supplier about any fees, and get in writing if any exist,
ahead of time. Some companies don't offset the fees they pay to the government
to their customers, while others do. It doesn't hurt to ask and this goes a long
way in determining the price of your propane, and the honesty and integrity of
your supplier as well. A company with nothing to hide will tell you what you want
to know.
If there are unresolved issues pertaining to
fees, who should I contact?
There
are many portals to lodge your complain in, and the consumer
action handbook site contains a sample letter you can use in formatting your
own. That site also has information on many resources you can use to lodge your
complaint. You can write to the different addresses, or electronically write in
using your email program/site.
