NewsPublic Affairs / February 5, 2014

Companies Increasing Prices Because Of Propane Shortage

Crossroads Energy customers are going to start paying more for propane because of the supply shortage. The company is invoking an emergency clause in its customer contract to raise the price $1.50 per gallon. Senior Vice President David Sheets says it’s necessary to keep the business operating. 2014-02-05T00:00:00-05:00
Companies Increasing Prices Because Of Propane Shortage

Earlier this week, Gov. Mike Pence joined fellow Midwest governors in signing a letter to President Barack Obama requesting immediate assistance to address a propane shortage.

Pence declared a state of emergency on the issue in January.

About 10 percent of Hoosiers rely on propane for heat, and many are now starting to feel the effects in the pockets.

But with the shortage, companies such as Crossroads Energy are raising prices.

"This supply and wholesaling price issue is unique to the industry," said Crossroads Senior Vice President David Sheets. "People that have been in it for many decades are saying this is a very unique winter and it certainly is unique to us."

For the first time in its 15-year history, the company invoked an emergency clause in its customer contract to increase prices from $1.99 to $3.49 per gallon.

"Just for round figures and easy math, let's say in February when we are talking about this, that's 100 gallons (for an average customer), so that would be $150 extra that they would pay with this increase," said Sheets.

He says customers are using 30 percent more this year compared to previous years.

Without the increase, there is a chance the business would have to shut down.

"We were looking at a potential loss of in excess of a half million dollars, which would basically put us out of business," said Sheets. 

Pence extended an emergency proclamation to waive propane transport statutes until March 1.

Indiana Attorney General Greg Zoeller announced, Wednesday, customers whose propane supply is less than 10 percent should call the AG office at 1-800-382-5516.

 

 

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