Propane prices growing
Elk River, Ace charging more than $4 a gallon
June 22, 2008
Steamboat Springs — Gas grill owners are feeling the burn of high propane prices.
“They have gone up tremendously,” said Bud LaFoe, store manager at Elk River Farm and Feed in Steamboat Springs. “Propane follows gasoline prices, and they have probably increased – I imagine it’s gone up over a dollar a gallon over last year.”
Elk River charges $4.15 a gallon for propane, and LaFoe estimated that the company charged about $3.15 at this time last year.
“I know it was $2.99 for a long time,” he said. “It doesn’t go up as fast as gasoline, but it does go up.”
Propane prices are tied to crude oil and natural gas prices, according to the federal Energy Information Administration. Propane is a byproduct of natural gas processing and petroleum refining. The price is tied more closely with crude oil, the information administration noted, because it “competes mostly with crude-oil-based fuels.”
Supply and demand, proximity of supply and the market that is served also influence price.
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LaFoe said customers have been talking about the price the same way they discuss gasoline price increases.
“I had one guy say, ‘If this keeps going on, I’m going to buy a charcoal grill,'” he said. “If it gets much higher, it’s going to be cheaper to use charcoal.”
At Ace Hardware, customers can buy 18 pounds of Royal Oak charcoal briquettes for $6.50. Filling up a 20-pound propane tank would cost more than $20. That size tank takes 4.2 gallons of propane, which Ace was selling for $4.99 a gallon Friday, Manager Scott Schlapkohl said.
The store has had to raise prices a few times, Schlapkohl said. But Ace hasn’t raised prices every time the cost of propane has risen, he said.
“It’s a real labor-intensive thing to fill a propane tank,” Schlapkohl said.
Elk River has a 5,000-gallon tank, and Ace’s holds 1,000. Both get their propane from Ferrellgas.
Schlapkohl said Ace hasn’t seen a decrease in propane sales. This time of year, most of the customers come in with small tanks for barbecue grills, he said.
“I don’t think it’s affected what we dispense, what we sell,” Schlapkohl said of higher prices. “It’s amazing how much propane we sell.”
LaFoe said propane is more appealing for some grillers.
“It’s like cooking on a gas stove,” he said. “Charcoal heats up and cools down, but propane gives constant heat that you can regulate.”
Schlapkohl said Ace sells one electric grill model. The store is considering stocking another, but it doesn’t see much demand for them, he said. People might just be used to paying more for all kinds of energy, he speculated.
“I guess a lot of stuff’s going up,” Schlapkohl said.
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