How is the price of propane determined?

The propane business is competitive and each company sets its own pricing policy. Most companies price propane so that the more you buy per year, the less you pay per unit.

Propane prices are usually based on the customer’s estimated annual use. When a customer uses additional propane appliances, total consumption and cost increase but the unit cost may be reduced. By the same token, if propane use decreases, the customer will likely pay a higher price per unit.

Another factor that can determine the price of propane, as with any other fuel, is the cost of acquiring the product from wholesalers. Price fluctuation may vary depending on a number of factors. Advance planning by a consumer can help control these costs (e.g., budget plans, fixed-price programs).

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  • TriGas & Oil Co, Fuel Oil, Federalsburg, MD

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