Wednesday, June 11, 2014

Contracting Propane

After a very cold winter, I inquired on contracting propane. We had to fill this past winter and paid a pretty penny for propane. I want to avoid that going forward.

I ordered our tank to be filled at the current propane price of 1.59 per gallon. We have a 1000 gallon tank and are currently around 7% full. For summer fills, they only fill up to 70% because propane expands with heat. This fill will cost us around $1000.

The contract price comes into play for future gallons. We have two options with contracting for the future. The first is to order and prepay at 1.81 per gallon. For 500 gallons, it would be $905 which would be payable now. The other option is to contract for 500 gallons at 1.85 per gallon. 10 cents per gallon would be due now for a total of $50. The $50 is credited to last fill of the 500 gallons. The remainder would be due when we fill.

Basically, to prepay we get a discount of $20. I would like to have this paid now because my commission checks tend to be smaller in the winter but I don't think its worth it. I don't really want to pay $2000 for propane right now. I would prefer to keep the money in savings for the time being.

The 500 additional gallons will be more than enough for us for a year. We keep our house warm, around 72 in the winter. We also heat our garage, plus our backup generator is fueled by propane. I'm sure we could cut our propane usage but I'm not willing to do so. I grew up in a very cold house and we live in a cold state. Heat is not something I believe in skimping on.

What option would you do? Would you do a contract for future propane or just risk it?


  1. WOW! I have no idea. We don't have to fill tanks (yet) or use a lot to heat living in a VERY hot state. However, I could not stand being very cold for very long. I don't know if I would do it for a $20 savings, but you are gambling that gas prices will stay the same. But in the same token, the price could go down (not likely I am sure). We would wait. Again, I know nothing about it though!

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