Pre-buying Propane Almost Always Pays Off
As we write this post, propane is at its lowest price so far this year. As (almost) always, we have seen a significant decrease in price from the winter months going into the summer. Pretty much the only time you don’t see a high propane cost in the winter is when we run into an extremely mild winter. We can look back on the mild winters of the last few years, knowing that we always cycle back and forth between mild and severe winters, and figure it is a safer bet to count on an average to harsh winter this year. Okay, you are right, we are just a propane delivery family, not weather forecasters, but look at the next two graphs.
Just in case you were wondering, here are the 2016 temperatures in Madison, WI, from 2016. Notice how the gray lines more often than not go above the red line (average historical highs) and more often than not they do not go below the blue lines (average historical lows).
How about the average winter temperatures for the last 150 years? The last two winters have definitely been warmer than the average. Do you think we are do for a colder winter?
Temperatures are just an indicator as to what will happen with prices. To know about pricing, we need to look at the commodity or wholesale prices, the prices the propane manufacturers share as their cost. I don’t know about you, but I can just look at this next graph to know pre-buying propane is a safer bet than buying when the tank is low in winter. This chart shows wholesale prices before shipping and other charges.
Notice how the price peaks in winter and then comes back down again. While the price is a little higher than last year, the price is actually still relatively low. As I write this, the current WHOLESALE price is about $0.59/gallon (note: it does cost a lot to ship propane, that is why you don’t get anything that low. By the time you add in shipping and other costs, we don’t even get it that cheap!). The wholesale price was lower during the summers of 2015 & 2016 because of the mild winters. Before the last two years, we have not seen wholesale prices at or below $0.59/gallon since 2004, with some months in past history reaching as high as $1.81/gallon. If we are due for a harsher winter or even just an average winter and if looking at the rest of history, we are expecting prices to go back up again, do you think it is a good time to lock in your propane prices? Well…does a fish swim?
Putting 2 and 2 Together on Propane Pre-buying
Now, I am not saying you MUST pre-buy your propane. I am saying I think you are a smart person. As a smart person, you are going to put 2 and 2 together to equal “Sign a Propane Agreement TODAY!” See how smart you are? You know how to save money the easy way.
Now, we understand life happens and not everyone can pay for the whole winter immediately. At least here at Boehlke, we offer a payment plan to make life easier and to allow you to plan the same amount of dollars in your budget every month to pay for the propane. We service about a third of Wisconsin, so if you are in our neck of the woods, give us a call, we would be happy to send you our current pricing or better yet, we would be thrilled to make you our next happy customer.
Feel free to give us a call today! 1-262-377-3346