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Propane Shortage Improves In Time For Cold Weather

December 9, 2013, 10:00 PM by Erich Schaffhauser

Propane Shortage Improves In Time For Cold Weather
GROTON, SD -

Despite a shortage of propane in KELOLAND this fall, suppliers are saying you won't have to worry about having enough fuel to heat your homes over the winter. But the price of propane is still high.

You'll find several homes and businesses in Claremont heated by propane. Outside of town, Justin Perkins' shop is, too.

"The whole thing is insulated. We have it set 50 degrees at night and on weekends and during the day we turn it up to 55 or 60 and we go through 500 gallons in two weeks, two and a half weeks," Perkins said.

At least that's been the pace during this cold stretch when several people have been going through more propane than expected. There had been a shortage of the fuel this fall in South Dakota, but it's improved with fewer farmers drying crops this late in the year.

"You're not going to run out of propane at your house. The propane is coming in but the inventories aren't replenished to 80 to 90 percent of what they want them to be," Full Circle Ag petroleum division manager Darren Medhaug said.

Medhaug says when you factor in cold weather, which typically causes an increased demand for propane, the price increases. For example, customers buying propane now could pay 40 cents more per gallon than those who bought propane through a contract before the demand increased.

Prices started dropping after farmers finished drying crops but there wasn’t a big gap between drying season and the current cold spell. So the price of propane didn't drop much before it started climbing again.

"When it's cold like this, people are going to be buying gas and if you can't replenish these inventories, it's going to drive the price," Medhaug said.

Perkins bought some propane in advance at a lower price, but he used it in his grain dryer. So he's expecting to pay more as winter continues.

"If it's high, we'll just have to pay out of pocket for it," Perkins said. "Got to have heat; got to stay warm."

While propane supplies in the state have increased, Medhaug says the frigid temperatures are contributing to a shortage in the type of diesel fuel used during cold weather like this.

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