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Propane Price Spikes In Cold Weather

January 23, 2014, 5:55 PM by Perry Groten

Propane Price Spikes In Cold Weather
LENNOX, SD -

Propane suppliers are scrambling to keep their customers warm this winter. Cold weather across the country has thinned-out the nation's propane supply, causing the price to spike.

Customers of Farm Gas Co-Op are paying $3.50 a gallon for propane, a price that more than doubled in less than a week.  And if the cold weather across the country persists, the price may keep climbing. So far, there's been no disruption in the supply locally, and the co-op's manager hopes it stays that way.

The calls for propane are as constant as the cold temperatures.

"If you commit to me, then I'm locking-in the price per what we talked about on the phone," Farm Gas Co-Op Manager Mitch Jensen said.

The per gallon price of propane is climbing by the day.

"It was $1.69 on Friday, $2.29 on Monday and now, Thursday, we're at $3.50," Jensen said.

The co-op is delivering 10,000 gallons of propane to customers each day. That's double the normal volume.

"I feel confident with my supplier, we have a good relationship so he keeps me informed very well and if he can get some loads, he lets me know, and if I have room for it in my tanks and if I want it," Jensen said.

Jensen is concerned that he might lose some customers if the price of propane keeps climbing.

"It's not good for the market because people may try to find a different form of heat, whatever that may be," Jensen said.

To keep that from happening, Jensen isn't taking on any new customers, he wants to make sure there's enough propane for the customers he has now.

"It's just crazy. It's just been absolutely crazy," Jensen said.

But not everyone in the co-op is paying that high price for propane. About a fourth of the customers signed contracts last summer locking in a price of $1.38 a gallon.

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