Pre-buying Propane?

[Bob_In_MN]

My propane dealer is telling me that I should take a fill at 109.9 and ride out the first part of the winter. He thinks prices will fall later in the winter.

I've always prepaid for 1000 gallons and locked in a decent price. Right now that price to lock in is 116.9--not that attractive.

Any other propane users out there? What are you doing or hearing?

Bob

 

[heehaw]

my daughter just bought 400 gal for 99cents per gallon...the rest of the dealers around here where at $1.29...
heehaw

 

[Hambone]

I think I am locked in at $1.249.
I buy it a little different though. I pay for it through my electric company. They, together with the local Co-op, put a meter on the house. I only pay for what I use, monthly with my electric bill.
They lock the price in around August so it's not too bad. Sometimes it is a little highter but no big upfront purchase.

 

[Spencer]

I paid $50 to lock in at $1.32 until April 1st.

 

[PitbullMidwest]

We filled the tank last June @ .77/ gallon and locked in @ 1.00 earlier this month for 600 gallons. Unless it's a really harsh winter that should see us through till April when prices start going down again.

Our provider said to look for 1.50/gallon or higher by Christmas, but who knows, it could drop with a mild winter.

 

[Bob_In_MN]

Thanks for the numbers everyone.

Interesting range of prices out there--similar to gasoline I guess. The local gas company that supplies urban/suburban houses is advertising on the radio. Their ads make it sound like everyone should be ready to pay some high prices this winter.

Five years ago when I moved to the country I didn't know about prepay and the gas company didn't tell me the plan existed. During the coldest months of winter I paid over $1.50 per gallon. The guy I deal with says that if prices do go up, he'll sell to me at his cost. Somehow I don't think his profit margin will take a big chunk off the price if things get ugly.

We've had pretty mild winters the last few years and we're due for a good old fashioned Minnesota winter.

Decisions, decisions...........

 

[Mrwurm]

This site from the state of Michigan has lots of historical information on the pricing trends for propane. I used the info found there to decide to prebuy or not. (did)

 

[JerryG]

My company is now letting out contracts for .95 a gallon this year. This is way up from last year, it was only .65 then. Last year I contracted 18,000 gallons, but the way things are starting, I think that I will go for 20,000 gallons this winter.

 

[Bob_In_MN]

Thanks Jerry and JerryG

I started thinking about it last night. Is there an advantage to the manager of the gas company if I don't pre-buy? He says he's got a list of long time customers that he is helping manage their gas filling/pricing. I'm not the most trusting soul and so I'm trying to see if this guy's got an angle (other than looking out for my financial well-being).

If he really believes prices will fall and I pre-buy--doesn't he make out as he is selling me gas at a higher price than what he is buying it for? If so--wouldn't a guy looking for profit would encourage his customers to pre-buy? He says they have mostly large commercial accounts and only a few hundred residential. He picks the long time residential accounts and follows them more closely. I don't know enough about how they buy in order to logically think through whether or not he has an ulterior motive.

Any thoughts out there?

Bob

By the way--if I could buy from a co-op (none near where I live), I could purchase for about $1.00.

 

[Hambone]

My opinion, he wants everyone to pre-buy.
A. He knows how much he needs to order.
B. He probably gets a discount when ordering volume.
C. It is a lot better weather to fill now versus cold.
D. Doesn't have to jump through his shorts when you call and are out of propane.