Propane gas prices doubled since last year, pointing to an expensive winter for rural households

Local News

CENTRAL ILLINOIS (WMBD) — Rural homes that use propane gas could see their bills double this winter, according to the manager of a local grain dealer and warehouse.

About 5% of households in the country, mostly rural, depend on propane gas, according to the Department of Energy. Farmers also use propane gas to dry corn in the fall.

Alan Knobloch, manager of Akron Services Inc. in Brimfield, said propane gas cost between 65 and 70 cents per gallon in 2020, what he says is the high end of the normal range. But this year, one gallon of propane is costing between $1.40 to $1.60, which is more than double.

Knobloch said they have had to raise their grain drying rates by 8%.

“It’s a cost that unfortunately is absorbed by the farmer because we have to raise our drying rates to be able to maintain our margin,” he said.

Knobloch said farmers are able to offset the higher costs of drying corn with higher grain prices, but local families are out of luck.

“It’ll hit the rural family harder than it will probably hit a farmer,” he said. “They really don’t have much of a way to mitigate any of that cost or doing anything about it.”

Patrick Kirchhofer, manager of Peoria County Farm Bureau, said it will depend on how cold it gets this winter.

“If we have a cold winter, we’re going to have a strong demand for propane and consumers could be looking at a higher price for propane. But if we have a mild winter, I don’t think that’s going to be the case. It will probably stabilize,” he said.

Kirchhofer said propane suppliers have a cheaper rate during warmer months and recommended filling tanks sooner than later.

“Hopefully people have filled their tanks prior to now and got that discount,” he said.

Knobloch attributed the hike in propane to crude oil prices, which are at the highest level since 2014. He said there are a number of factors in play, including inflation, OPEC limiting production, and the halt of new fracking sites.

“Prices seem to rocket higher and they come down like a feather, so we’re probably looking at an extended period here of high energy prices,” he said.

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