2015-16 State of the Industry: Gallon sales trends

December 28, 2015 By    
Click to enlarge.

Click to enlarge.

Propane sales dipped for five straight years before rebounding two years ago, according to the American Petroleum Institute’s “2013 Sales of Natural Gas Liquids and Liquefied Refinery Gases” report. Sales increased 14 percent to reach 8.8 billion gallons in 2013.

Propane sales are down more than 25 percent from where they were at the turn of the century, but the 2013 gain is at least a step in the right direction. Individual propane retailers largely tell LP Gas that their gallon sales are trending upward, as well.

According to an LP Gas survey of retailers, propane gallon sales have increased over the last five years for 62 percent of retailers. Twenty-one percent report flat sales over the same period, and 17 percent have experienced declines.

Sales are trending in one direction or another for a variety of reasons. Retailers cite colder weather, new homebuilding, acquisitions and heating oil customer conversions as some of the reasons why their sales are up. Sales are down elsewhere because of warmer weather, conservation, increasing propane competition, a lack of consumer confidence in pricing, and conversions to natural gas, electricity and other forms of energy.

Regarding the greater industry, retailers are divided on their feelings about the state of it. About half (47 percent) of retailers tell LP Gas they’re satisfied with the current state of the industry. Almost one in three (29 percent) say they are not satisfied with the state of things, and about one in four (24 percent) aren’t sure how they feel about the propane industry right now.

PERC has been moving toward a new consumer education campaign since the U.S. Department of Commerce lifted a restriction that had lasted about six years.

PERC has been moving toward a new consumer education campaign since the U.S. Department of Commerce lifted a restriction that had lasted about six years.

Retailers are at least more confident about the state of their propane companies. Two in three (67 percent) are satisfied with the state of their companies, while one in four (26 percent) is not. Seven percent aren’t sure whether they’re satisfied or not about the state of their companies.

Could the Propane Education & Research Council’s (PERC) upcoming consumer education campaign increase retailer confidence? Retailers seeking gallon growth are optimistic the PERC campaign, which is expected to be unveiled in 2016, will drive more use of propane. PERC has been moving toward a new consumer education campaign since the U.S. Department of Commerce lifted a restriction that had lasted about six years, and 60 percent of retailers believe the campaign will spur gallon growth in 2016 and beyond.

On the other hand, 35 percent of retailers aren’t sure whether or not the PERC campaign will spur growth, and 5 percent say the campaign won’t lead to growth at all. The majority, however, is confident PERC’s consumer education activities will be effective.

“The PERC restriction being lifted is going to help,” says Carlton Revere, president of Revere Gas in Hartfield, Va. “Fortunately, a lot of the work they did before is already in place.”

Kevin Yanik

About the Author:

Kevin Yanik is the senior editor of LP Gas Magazine. Contact him at kyanik@northcoastmedia.net or 216-706-3724.

1 Comment on "2015-16 State of the Industry: Gallon sales trends"

Trackback | Comments RSS Feed

  1. Gary Ivers says:

    Never going to grow our market with propane dealers in Tampa Florida and other areas charging 3 to 5 dollars per gallon.
    Just completed a local survey last week showing a low of $3.25 and a high of $5.30.
    I would be glad to send you a copy.
    Just lost a converted customer because of availability and price while trying to buy propane on the road. Having to drive 20 miles to find it and then the local dealer wanted $4.00 for autogas.
    The propane industry is its own worst enemy.