How Do Dealers Set Propane Prices?

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If you choose to heat your home or any of your home appliances using propane, then you will most likely purchase the propane through a propane dealer. You might notice that by going to different dealers at different times of the year, you will be getting very different prices on the propane you need for your home. This is because propane dealers are allowed to set their own prices and there are many factors that go into the prices that they set.

  • Talk to your state propane regulator. Each state can set up their own laws regarding propane price. For example, your state might not have a law that prohibits excess fees, such as a minimum purchase fee. If this is the case, you might see the price of propane rise as fees are tacked on. Find out what laws your state propane regulator have in place regarding price.

  • Ask the propane regulator if your state collects any fees from the propane dealers, such as installation fees. If this is the case, then the price you pay might be higher to offset this additional cost for the dealer.

  • Look for propane dealers in your area. If you find many dealers in a small, concentrated area, then the price could be lower. This is because these dealers have to compete with each other for your business. However, if there is only one propane dealer in your region, then the price is likely to be higher due to lack of competition.

  • Consider whether or not propane is in demand where you live. Something as simple as colder temperatures or a cold weather climate will put propane more in demand and will increase the price per gallon that you pay.

  • Find out where the propane that you're buying from your dealer comes from. The more distance the propane has to travel, the higher the price might be.

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