INDIANAPOLIS (AP) — After weeks of propane shortages and high prices during the bitterly cold winter, some relief is coming to rural residents who have dealt with chilly homes and frustrations keeping their heating tanks filled.
Residential propane prices have fallen for a second straight week, down from about $4 a gallon in late January to $3.76 a gallon on Feb. 10, the U.S. Energy Information Administration said Wednesday in its weekly report.
Supplies of the fuel that 5.5 million U.S. households, mostly in the Midwest and South, use for heating have improved slightly due to efforts by the propane industry, the federal government and states. But the nation's propane supply remains low, and more blasts of winter cold would quickly send prices back up, said Roy Willis, president and CEO of the Propane Education & Research Council.
"It's really a weather-driven issue — another prolonged cold snap could strain supplies and prices for the next couple of months. Winter isn't done with us," he said Thursday. "When stockpiles get this low, and you get below freezing temperatures for a week to 10 days, consumption levels go up and up and up, and prices go right along with it."
National propane supplies were depleted by a late harvest that increased demand from farmers who needed to dry an unusually large amount of grain before storage. The colder-than-normal winter across much of the nation drained supplies further.
Willis said propane supplies have been replenished somewhat, helping lower prices slightly in the last couple of weeks, due to a collaboration between the government and industry to move supplies from large propane storage areas, primarily in the South, into the Northeast and Midwest. Propane shipments from North Africa and Europe have also helped, he said.
The improving supplies and warmer weather prompted Paducah, Ky.-based United Propane Gas announced Thursday it was resuming shipping the fuel to its prepaid customers in 10 states in the Midwest and the South days earlier than it had anticipated. The company had temporarily halted propane shipments to commercial customers in late January as propane supplies shrank.
"Propane supplies have loosened up and the warm weather indicates that the end of this national crisis may be in sight," UPG President Eric Small said in a statement.
But for now, the company is limiting its propane deliveries to 250 gallons per each of its prepaid customers, who can receive additional deliveries every 15 days.
Wholesale propane prices have also fallen slightly in the past week, dropping to about $2.61 a gallon as of Feb. 10, according to the Energy Information Administration's latest report.
Mollie O'Dell, a spokeswoman for the National Propane Gas Association, said the drop in wholesale propane prices is being driven by many factors but the weather obviously continues to be a big influence on prices.
Prices could drop further next week thanks to an additional 500,000 barrels of propane that are being shipped to the Midwest and the Northeast under a Tuesday order by the Federal Energy Regulatory Commission.
"A lot of it is weather dependent, but the additional half a million barrels will certainly help take some of the pressure off supplies" and help moderate wholesale and retail prices, she said.
Minnesota Commerce Commissioner Mike Rothman said that while additional propane shipments are getting into the pipeline system and to terminals, there remain "a lot of distribution kinks to be worked out in terms of prices."
He said Minnesota state government has gotten more than 3,000 calls to a hotline set up for consumers with problems or concerns about propane supply and prices.
"While prices are coming down, they are still high," Rothman said.
Scot Imus, executive director of the Indiana Propane Gas Association, said moderating temperatures and indications that the propane supply is stabilizing are good signs, but propane users still need to be vigilant and conserve. He said the low propane supplies remain a "crisis" for those who rely on the heating fuel.
"It's getting better, but we're not out of the woods yet by far," he said.
Central Indiana residents Kim Casada and her husband, Charlie, are still feeling the propane pinch. They shut off their furnace on Jan. 24 and switched to using four electric space heaters to warm their 3-bedroom rural home south of Muncie, Ind.
The couple finally got a 150-gallon propane shipment on Feb. 4, but because their supplier said he wasn't sure when they might get more propane, they decided to keep their furnace off rely on their space heaters until early March.
Casada said she and her husband have covered their windows inside with plastic to keep the heat in and cold out and closed off their bedrooms to increase the temperature in their living room, where they've been sleeping most nights. They've been wearing sweaters and layered clothing to deal with indoor temperatures in the lower 60s.
"We don't know what else to do," Casada said. "These chilly nights, it's just really hard and we're both exhausted. ... There are so many people in the same boat as us."
Associated Press writer Doug Glass in Minneapolis contributed to this report.