By Leo Kirby, COO, Ideal Gas
The average propane price to Florida residents as of March 31, 2017 is over $5 per gallon, according to the U.S. Energy Information Administration. Tank rental fees can be $100 a year or more, and delivery fees can be $15 or more every time a customer’s tank is filled.
If a Florida customer averages 300 gallons of propane a year with two deliveries a year, they can pay between $1,500 and $2,000 every year for their propane supply. Obviously, the more propane they use, the more deliveries they have, the higher these costs will be.
So what is the solution to saving money on residential propane?
Customers need to be aware of these costs, to ask questions, and to fight for lower prices. But in the end, if they are tied into a lease agreement, they are at the propane company’s mercy. The company may or may not be willing to negotiate prices or fees. The best answer is for the customer to own his own tank. This might be cost-prohibitive for some customers. But it makes sense to learn how much it costs to own and install a tank, and calculate the break-even point before signing a tank lease agreement with a propane company.
For instance, at today’s prices, it is reasonable to purchase a 250-gallon tank, have it buried and connected at the customer’s property, the system checked for leaks, and the tank filled for the first time for around $2,500. So, looking at the math, in less than two years the customer has broken even and his annual costs could be reduced to less than $500 – depending on the cost of propane at the time.
But the most important thing is, the customer who owns his tank is now in charge of his propane costs. If he or she feels the company he bought the tank from is not treating him right, all he has to do is call around to other companies and check prices for his “customer owned” tank. Because the propane companies who provide quotes do not have an investment in the tank, they will almost always charge less for the propane to fill the tank than a company who owns the tank.
I believe the best way to regulate an unregulated industry is by acquiring knowledge. For residential propane customers in Florida, that knowledge and a reasonable upfront investment can save customers a lot of money over the years, and put them in charge of their propane supply costs.