Propane hits $5 a gallon
As temperatures nosedived below zero this week, propane costs went up. And up. And up.
From $1 a gallon last week, to $3 a gallon earlier this week to $5 a gallon Thursday.
Paying significantly more for heat is a harsh reality for central Iowa businesses, farmers and homeowners as a shortage of propane in the upper Midwest has brought about the record-setting spike.
The unprecedented price surge caught the attention of U.S. Sen. Charles Grassley and Gov. Terry Branstad.
Sen. Grassley asked the Federal Trade Commission on Thursday to review the conditions that have led to the escalation in cost
“The recent propane supply shortage and price increases are causing hardship for the many rural Iowa families that use propane to heat their homes,” Grassley said. “I am asking the agency that oversees business practices to look at the propane situation and see whether the price increases are legitimate or manipulated in any way to consumer’s detriment.”
Branstad also weighed in on the issue.
“Prices are changing daily and going through the roof,” he said Thursday. “We’re very concerned.”
Branstad said state officials are investigating why prices are climbing so dramatically, and he plans to talk with federal lawmakers about the possibility of market manipulation.
“We want to get to the bottom of why prices are going up so much,” he said.
However, Branstad said he didn’t want to create a consumer panic.
“We don’t want people to top off their tanks if they don’t need to refill until next spring,” he said. “That could take from people who desperately need it.”
Branstad said he hoped that prices would stabilize and decline after Texas officials agreed to waive licensing, permitting and certification requirements on trucks and operators hauling propane.
Branstad had made the request to Texas officials earlier this week as prices began to climb.
The issue is one of supply and demand, said Deb Grooms, executive director of the Iowa Propane Gas Association in Des Moines on Wednesday.
Grooms said the situation began to develop late last fall, when farmers used significant amounts of propane to dry crops.
One of the coldest Decembers in recent years followed while companies struggled to replenish supplies.
But Grooms said her organization had been proactive in attempting to resolve the crisis.
“We are working at all levels to seek relief from the current distribution and infrastructure problems facing Iowans and their fuel providers,” she said.
Specifically, to allow for expedited delivery of propane, IPGA has sought relief from the federal Hours of Service restrictions which limit the transportation of fuel cargoes.
“Governor Branstad is aware of the need and previously authorized three “hours of service” waivers for truck drivers transporting propane,” said Grooms. “Recently, the U.S. DOT Midwestern office also issued a regional order which will allow transporters to move product more freely.”
The regional order, unprecedented in recent Iowa experience, impacts 10 Midwestern states. A similar order is in effect for 14 Eastern states. To date, 30 states have issued Hours of Service relief this winter.
“I’ve been IPGA’s executive director for 18.5 years, and I have never seen anything like this,” she said of the shortage. “The job is usually fun, but it has not been fun this week. We’ve had reports of suppliers running out and customers only receiving a portion of their order.”
Officials with Mid Iowa Community Action in Marshalltown said they are prepared to help.
“We urge low-income Iowans who are having trouble paying their fuel bills to contact us immediately,” said Paula Arkema. “MICA serves Hardin, Marshall, Powesheik, Story and Tama counties, and we are equipped to take applications through April.”
Arkema said MICA pays fuel suppliers directly on behalf of clients.
Additionally, if one qualifies for fuel assistance they are also eligible for weatherization benefits, she said.
For more information, contact MICA at 641-753-5523.
The rapid increase in prices has a state energy assistance agency promising to boost the amount of emergency money available to low-income Iowans by $600,000.
Jerry McKim, who leads a state’s energy assistance program, said Thursday the money should help rural families struggling with heating bills. The move boosts the amount of emergency assistance to $600 a household from $500.
The low-income home energy assistance program, called LiHeap, also is working with propane suppliers to reduce the minimum amount of propane that must be purchased at one time, to make it more affordable to families.