US propane prices rise 30% in 2020-21 heating season

The residential price of propane in the U.S. averaged $2.30 per gallon as of March 29, which was nearly 43 cents a gallon higher than at the same time last year, according to the U.S. Energy Information Administration (EIA).

U.S. average residential propane prices increased by more than 52 cents a gallon, or 30 percent, during the 2020-21 heating season, which began Oct. 1 and ended March 31. The increase in prices can be attributed primarily to higher crude oil prices, seasonal withdrawals from propane inventory and increased global demand for U.S. propane exports, the EIA says. The price change was the largest within-season increase in residential propane prices since the 2013-14 season when propane markets tightened because of a polar vortex and low inventories.

According to the U.S. Census Bureau’s 2019 American Community Survey, propane is the primary home heating fuel in 5 percent of U.S. homes and tends to be more common in the Northeast and Midwest. At least 14 percent of homes in Vermont, New Hampshire, South Dakota, North Dakota and Montana use propane as their primary heating fuel.

U.S. propane inventories declined more than last year during the 2020-21 winter heating season because of increases in seasonal U.S. propane exports to Asia. As of March 26, total U.S. propane inventory levels were 39.2 million barrels, 34 percent less than at the same time last year, while inventories in the Northeast (PADDs 1A and 1B) were 12 percent less and in the Midwest (PADD 2) were 14 percent less than at the same time last year.