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Why is the cost of propane so high?

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Photo: Video by tmj4.com

Why is the cost of propane so high?

By Charles Benson. CREATED Jan 27, 2014 - UPDATED: Jan 27, 2014

WAUKESHA - The propane shortage has viewers like Dennis in Waukesha asking TODAY'S TMJ4 if there's price gouging in the market.

Prices have jumped dramatically this month.
 
It's not just Wisconsin - its all off the upper Midwest that's feeling the shock. 
 
Propane gas prices in the Badger State are 46% higher than last year that's hundreds of dollars more for homeowners.
 
The state says propane prices popped about a dollar gallon from the beginning of December to mid January. But in the last few days prices have jumped to four to six dollars a gallon. Why? 
 
"It's principally that the propane is not where it is needed and that's particularly the case in the Midwest," said Jeff Petrash, Vice-President of the National Propane Gas Association.
 
Petrash says the propane shortage began in late fall. A record wet grain harvest sucked up five times more propane than usual to dry the grain.
 
"This left propane inventories in the Midwest low going into the heating season," said Petrash.
 
Add in pipeline maintenance problems and a much colder winter than usual and you have the perfect storm.
 
Petrash says the industry welcomes any investigations into claims of price gouging.
 
"If there are behaviors occurring in this situation that are inconsistent with free markets we would welcome having those unearthed and investigated."
 
Wisconsin's Attorney General is monitoring prices and propane dealers in the state say they are just as stunned by the rapid rise in prices from whole sale suppliers.
Charles Benson

Charles Benson

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Charles Benson is one of the most reliable, trusted and experienced reporters in southeast Wisconsin. If there's a big story going on, Charles is usually there leading the way.