Cost Of Propane "Through The Roof"; Gov’t Officials Call For Action

Date posted - January 27, 2014

propane tank lidNorthwest Iowa — Propane prices at some Iowa retail outlets have reached $5 a gallon, an increase of roughly two bucks in two days. Propane supplies are tight across the Midwest following an extremely cold start to the winter and a wet fall harvest. Harold Hommes, a market analyst at the Iowa Department of Agriculture, says steps are being taken to help suppliers keep up with demand.

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(as said) “Twenty-four governors have issued hours of service waivers for the transport industry, so drivers’ hours are not counted as they wait in line (for propane),” Hommes said.

Hommes calls the hours of service policy by the Department of Transportation a “very severe restriction” to getting propane to where it’s needed in a timely manner.

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(as said) “You can imagine a trucker driving a modest hour-and-a-half or two hours to a terminal to get propane…if he has to sit there 6 to 8 hours, he’s essentially out of hours and can’t return home to deliver that propane,” Hommes said. “Lifting hours of service requirements was a huge benefit for the industry and we have a lot more propane ‘under wheels,’ if you will.”

The Department of Agriculture routinely surveys 28 propane retail outlets and the average price across the state on Thursday hit a record high of $4.18 a gallon.

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(as said) One year ago, propane prices in Iowa were at $1.39 a gallon. Hommes predicts prices will peak soon and begin to drop.

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(as said) “But, as we’ve seen in petroleum markets, the spikes that occur tend to take their time working their way back down,” Hommes said.

About 15-percent of Iowa homes are heated with propane, mainly in rural areas.

The Executive Director for the Iowa Propane Gas Association, Deb Grooms, is hoping more emergency funds will be made available to those who qualify for the federal heating assistance program LIHEAP and rely on LP to heat their homes.

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(as said) “We are working closely with the energy assistance people at the Iowa Department of Human Rights to try and get the national congress to release more emergency funds,” Grooms said.

Senator Chuck Grassley has asked the Federal Trade Commission (FTC) to review the conditions that have led to propane cost spikes. “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’m 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 consumers’ detriment.”

Governor Terry Branstad and Lt. Governor Kim Reynolds have sent a letter to President Barack Obama urging the administration to take action to help ease the burden the propane shortage is putting on Iowans and other Midwesterners.

Radio Iowa assisted with this story.

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