Low Propane Prices Mean Big Winter Savings

man holding a light

Consumers who heat their homes with propane are singing a happy tune this winter. Even as extreme cold grips much of the country, propane users are getting a bargain on their heating bills. That’s good news for families who use propane for their furnace or boiler, not to mention for other appliances like water heaters and clothes dryers.

Dramatic Price Reduction

The drop in prices is a relief after last winter, which proved to be an expensive one for most people.  Last year, the average price for a gallon of propane reached a high of $3.70, according to the U.S. Energy Information Administration. This year, the average price has hovered around $2.40 per gallon, although prices vary widely by region. In general, the fuel costs more on the East Coast and less in the West, Midwest and Gulf Coast.

The high prices last year were a result of a crash in supply, in part thanks to the unusually cold winter, combined with some distribution problems. An unseasonably wet harvest also contributed to the shortage, because wet crops get dried using propane. The double whammy of high prices and low temperatures left consumers facing sky-high bills — the average propane-burning household spent $2,267 on fuel for the winter.

Abundant Supplies

This year, by contract, suppliers secured their inventories, which are about 64 percent higher than they were last year, according to the Montana Standard. That means plenty of propane to go around and no pinch on consumer pocketbooks. The whole story for this winter has not yet been written, and conditions could always change in February, but the combination of lower prices and more moderate weather should result in a lot of happy homeowners when the monthly heating bills come around. Families spend about 29 percent of their energy bill on heating, according to Energy Star, the U.S. Department of Energy’s efficiency program.

The drop in price notwithstanding, propane is still considerably more expensive than heating with natural gas. However, not every house has access to gas, and propane is usually cheaper than oil or electric heat, depending on your specific circumstances.

Efficiency is King

Regardless of your preferred fuel type, you can take other measures to winterize your home to increase the efficiency of your furnace and drop your bills by an even greater degree. Steps like sealing cracks and leaks in your house, installing a smart thermostat and having a professional give your furnace annual maintenance can make a big difference when it comes to savings. And if your furnace or boiler is more than a decade old, it might be time to consider upgrading to a newer, Energy Star-compliant model.