Propane prices spiking

Dave Stewart
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Lori Kays and Doug Hurry meet at Beanz in this Guardian file photo

Continuing bitter cold, increased demand causes increase in propane prices

The co-owner of Beanz Espresso Bar says the skyrocketing cost of propane means they’re turning off the stove a lot more than usual.

Lori Kays says it’s not exactly affecting business but it has made her more cognizant of making sure they don’t waste any propane.

“We’re certainly being more careful about how many ovens we have on and how much propane we’re using,’’ Kays said Friday.

A shortage of propane in parts of Central Canada has suppliers scrambling to find extra fuel, although the Canadian Propane Association insists there is no supply shortage in Canada. The latest statistics from the National Energy Board show propane inventories were nearly 30 per cent lower across the country in January compared to the same month last year.

The Island Regulatory and Appeals Commission approved the latest price jump, an eight-cent hike on Jan. 15.

One of the country’s biggest suppliers, Superior Propane, told The Guardian on Friday that prices will remain high for the next few months.

“Pricing is influenced by supply and demand factors in North America,’’ the company said in a statement.

“The increase in pricing is caused by increased demand due to subzero temperatures and uncharacteristically heavy snowfall that delayed deliveries of propane. Traditionally, prices have softened in the spring when winter heating demand eases. Superior currently expects prices to ease at the end of April or early May.’’

The owner/operator of Nissen Propane in Charlottetown agrees, saying demand has skyrocketed a few years after so many home owners installed propane fireplaces to combat rising home heating oil costs.

Juanita Corrigan, co-owner of Corrigan’s Wood Stove Centre in Charlottetown, says sales of propane appliances aren’t falling off but people are choosing other options.

“There’s a bit more of a comeback with pellet stoves and definitely wood stoves. People are kind of back into the wood moreso,’’ Corrigan said. “Propane seems to be always on an even keel for us because it’s a fireplace. We find the price of propane right now is not really affecting sales. Thank goodness.’’

Allison MacEwen, director of regulatory services at IRAC, says a perfect storm of factors is responsible for the high cost.

“It’s kind of a combination of unfortunate circumstances that have all compounded to put the pressure on . . . in a relatively short period of time,’’ MacEwen said.

He listed the Imperial refinery shutdown in September, problems in November/December with the Sable Island production platform, the wet harvest in the Midwest that had farmers using propane dryers more than usual, demand from export markets and the ice storm in Newfoundland and Labrador that knocked out the refinery in Come By Chance as factors which are impacting the price.

MacEwen said the Come By Chance refinery doesn’t supply propane used on P.E.I. but they needed to backfill their supplies and started taking some of P.E.I.’s traditional sources.

“Those are the local issues we face. Some of them are of a temporary nature (while) some will persist over time. We’ll monitor it on a regular basis (but) it’s a little hard to predict. No doubt, we’ll get warmer weather and that will help. Given the factors that are out there that (means) we’re probably into this for some time.’’

 

With files by The Canadian Press

dstewart@theguardian.pe.ca

Twitter.com/DveStewart

Organizations: Island Regulatory and Appeals Commission, Canadian Propane Association, National Energy Board Superior Propane The Guardian Canadian Pressdstewart

Geographic location: Central Canada, Charlottetown, Canada North America Sable Island Midwest Newfoundland and Labrador

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Recent comments

  • Gene Poole
    January 27, 2014 - 11:45

    The US has more gas and propane reserves than can be used in hundreds of years. What is the real reason for the shortage? Did US Government Officials cut reserves to keep prices up ?

  • Same old same old
    January 25, 2014 - 09:16

    Once upon a time in the 70's, the oil companies claimed shortages and in a year the cost of oil and gas doubled and tripled. Now it is propanes turn eh. Shortage my eye, greed and corruption at its worst and IRAC backing it all up all the way to the bank. Time to get rid of this costly dinosaur once and for all. Looks like it is time for natural gas since we are already sitting on it.