In the Know: Government

With change comes uncertainty, as well as opportunity. Retail propane marketers must make their voices heard by those in power. Photo: iStock.com/olya_steckel

In the Know is a monthly partnership between LP Gas magazine and Propane Resources. Our focus this month is on propane inventory, addressed by Tamera Kovacs, financial consultant and industry expert in business valuations and sales for Propane Resources.

Q: What impact do you anticipate the Trump administration and the Republican-controlled Congress having on the propane industry?

A: Nothing about November’s election was conventional, and it is doubtful the administration will operate conventionally. The way the Republican-controlled Congress reacts may, in fact, be unconventional, as well.

In elections past, it may have been easier to forecast how the federal government would operate. However, I’m not one to really discuss politics – and this article is no exception.

What is important for retail propane marketers to realize is with change comes uncertainty, as well as opportunity. We as Americans must remember first and foremost that we have one of the greatest gifts – the gift of choice. We have the right to vote, as well as First Amendment rights: the freedom of speech.

Retail marketers need to take advantage of the First Amendment to ensure your congressmen and senators hear your voices. The National Propane Gas Association hosts Propane Days in Washington, D.C., every year, but don’t let that event be the only time your voices are heard.

The Trump administration has promised to bring jobs back to America. These are not corporate jobs but rather the industrial, blue-collar type (i.e. textile, manufacturing). When these industries left the United States, the areas in which these businesses resided became extremely depressed economically.

If the Trump administration is successful in bringing jobs back to rural America, it could boost the rural economy, which in turn has a direct correlation with the propane marketer’s growth and profitability.

Another area of interest to retail propane marketers is corporate taxes. If the corporate tax cuts referenced by the Trump administration are implemented, they could help retail propane companies, especially C corporations.

Currently the highest tax rate being imposed on corporations is 39 percent, but a proposal is being discussed to cut that maximum tax rate to 15 percent. This would mean significant tax savings. These are savings retail propane companies could use to become more competitive in their employee offerings.

Related questions retailers should ask are: How will these discussed changes or a repeal of Obamacare impact my business or employees? How will deregulation of industries, specifically the oil and gas industry, impact my business? How will the change in regulations surrounding the Occupational Safety and Health Administration and Department of Transportation impact the industry?

These are a few areas that can directly impact the retail propane marketer. As an industry, we need to work together to understand how these issues will impact our businesses.

There is no way to know precisely how the Trump administration and the Republican-controlled Congress will impact the propane industry. But one thing we do know: As an industry, we need to take advantage of our First Amendment rights and make ourselves heard.
Work together through your state associations and formulate plans of action. Then implement those plans.

Tamera Kovacs is a financial consultant and industry expert in business valuations and sales with Propane Resources. She can be reached at tamera@propaneresources.com or call her at 913-262-0196.