Liquid Propane Cost Per Gallon – The global pandemic has presented a historic challenge to companies in the propane industry, but in the nearly three years since retailers turned their attention to increasing health and safety measures in response to the new coronavirus, several economic factors are now relevant to daily operations.
Where business owners could once be propagating, looking at a select few while pushing their business forward, the list seems to have grown. Neither is it ugly. Added to the list of issues to overcome are inflation, labor disputes and supply chain disruptions, all while trying to keep an eye on other integrated processes, including the safe delivery to end-user oriented customers.
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Running a propane business in “normal” times is pretty tough. But factor in the challenges created in part by the COVID-19 shutdowns, including the impact to the U.S. economy and demand imbalances, marketers are facing a different beast in today’s propane industry.
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“It’s one of those things where people who are good at what they do and run their own businesses sometimes stand out in those times when things are tough and prove their worth,” Hampton says, acknowledging the gas tank owners who have proven themselves. difficult times times
Average US gasoline and diesel prices rose in March after Russia’s invasion of Ukraine and set a new record high in June — about $5.02 for regular gasoline and about $5.82 for diesel, according to AAA. Rising fuel prices this year have given propane industry leaders an opportunity to promote the cost advantages of offering autogas to fleet vehicles.
“The costs associated with doing business in our industry are increasing, including investments in equity with the customer. So it’s become quite a challenge,” says Stuart Weidie, president and CEO of Blossman Gas and president of the Propane Education & Research Council (PERC).
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“Despite a difficult operating environment resulting from a hot and volatile weather pattern, historically high commodity prices and inflationary impact factors, we were able to effectively manage margins and expenses,” said Michael Stivala, president and CEO of Suburban Propane.
Superior Plus Corp., with operations in Canada and the United States, notes that “Wolf’s wages increased due to increased costs, expenses, labor costs and other costs affected by inflation,” which it struggled to overcome. Ferrellgas means “expenses of inflation of material and other raw materials, such as steel used in the tank”.
US steel prices rose in late 2021 and then declined. Volatile raw material costs have contributed to higher propane tank costs.
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The price of steel reached historic highs in late 2021 and early 2022 before retreating later in the year. Tank manufacturers Manchester Tank and Worthington Industries announced price increases this spring – from 8 to 15 percent depending on the product in Manchester to 10 percent on portable steel LPG cylinders in Worthington, using raw material costs and challenges in transportation and the labor market. .
Time will tell if the price of propane tanks will drop, says Weidie, whose concern lies in the future of the industry.
“I hope it never slows down the growth opportunities of our industry – we need to invest to get a new customer,” he said.
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Inventory costs have been impacted by retailers’ struggles to procure the necessary equipment for their operations, as supply chain inconsistencies have proven to be another obstacle to doing business. Dealers reported LP Gas supplier outages on propane cylinders, especially 20-mna and forklift cylinders, as well as other equipment such as parts and accessories.
“We already have reuse equipment; we buy equipment and refurbish it; and as far as parts and accessories, we try to order them before they are needed,” says Matt Drennen, propane division manager at O.E. Meyer.
Donna Howay-Germond, director of supply chain management at Paraco Gas “We started using second- and third-party suppliers and companies that we hadn’t used before. We really started to look at everything and just started to race ourselves. ] still, so we started to do more to react to the problems.
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“Our company has more employees than we’ve ever had,” said Weidie, citing 1,000 at Blossman Gas, “but we have more openings than we’ve ever had because of the growth.”
Filling vacancies, especially for technical service and delivery people, is the only obstacle preventing the company from “big growth,” says Weidie.
Blossman Gas has hired its local leaders to work in communities where candidates can find “and show how much energy there is that they can really serve well,” says Weidie. “They don’t have to sit at one PC behind a desk all day, and they can talk to people outside.”
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While most industry leaders agree that attracting and retaining employees continues to hinder business, LP Gas has learned about some of the methods vendors are using to address their operational challenges.
700 Propane has implemented an employee referral program to help with recruitment efforts, explains COO Ron Snyder at this year’s LP Gas Growth Summit. Acer Energy has targeted these schools and driver’s technical schools, adds CEO Steve Farkas, while Pacific States Petroleum has adopted an employee stock policy.
“Every employee has become a 100 percent owner of the company,” says Jason Edwards, general manager of propane operations at United States Pacific Petroleum.
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LP Gas’ pay and benefits survey this year also found that nearly 90 percent of propane sales respondents hired paid employees — an average of 12 percent over two years. A quarter of those surveyed were paying more time, while offering fewer flexible hours or increased health coverage.
“We’re just trying to make sure that we maintain the integrity of the business and that loyal people are happy,” said Cathy Waleys, general manager and owner of the Colorado business.
They also got an apprenticeship. The National Propane Gas Association (NPGA), in partnership with PERC and the Department of Labor, offers such a program to job seekers – serving technicians and commercial drivers, while companies such as Blossman Gas and ThompsonGas have launched their apprenticeship programs.
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Meanwhile, PERC has a strong emphasis on workforce development and has produced tools for businesses and communities.
The plan’s efforts include educational webinars, school supplies, and support for regional and state job boards. Its program of grant and scholarship programs helps to bring innovation front and center in technical schools and community colleges.
Weidie says it’s imperative that propane industry stakeholders work together to ensure that the resources vendors offer are readily available.
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“We as an industry need to do better coordination between PERC, which tools and methods, NPGA and public associations to educate, especially the independents in our industry, go out and find people to serve in their companies. , to serve their customers,” he said.
Salespeople spend sleepless nights “trying to figure out how to crack the code” on the problems their businesses face, says DC Propane’s Snyder.
While absorbing economic power on the one hand, the propane industry continues to defend itself from another attack, often from organizations and regulators who resist gas in new mandates that favor electrification.
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Hoping that successful results in the midterm elections could prevent the threat posed for years, some members of the industry lost sleep on November 8th awaiting national and state results.
Republicans won control of the US House of Representatives, though with a smaller-than-expected majority, where victories provide more balance of power in the federal government. Regardless of the outcome of the runoff election in Georgia, the Democrats retained control of the Senate.
“Maybe, we decided because the new House is Republican, and I think the threat to our industry should decrease under the new laws in the next year or two,” said Michael Baker, NPGA president of federal legislative affairs. through an NPGA webinar on how the national electrification energy policy could play out after the election.
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Additionally, Baker said, NPGA expects House Republicans “to come out swinging big legislation to promote domestic energy production,” although it is unlikely to make further progress and increase Democratic activities from the next few years.
“I hope the federal agencies will be a little more cautious in some of their actions,” said Steve Kaminski, president and CEO of the NPGA, about evaluating the election results. “But frankly, I don’t think that’s going to happen.”
In preparation for what lies ahead, the NPGA has restructured its advocacy initiatives into four pillars: federal legislation, federal regulation, state/municipal standards, and standards.
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A divided House and Senate should slow down federal legislative proposals in the next term, says Kaminski, who expects other districts to be “very active.”
“We’re going to see continued, very aggressive anti-gas measures coming from the Department of Energy, coming from the EPA,” he says. “We’re in the middle now with these appointments.”
Actually, Jeff Stewart, president of Blue Star Gas
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