Missouri Attorney General Chris Koster is investigating the reasons propane prices spiked this month.
Sparked by a Jan. 24 request from Sen. Mike Parson, R-Bolivar, and 40 consumer complaints, the attorney general's consumer protection division is conducting an investigation on the gas, which reportedly increased to roughly $5 per gallon in recent days from approximately $1.94 per gallon in December, according to a news release.
“Missourians are justifiably concerned about the dramatic increase in propane prices, affecting their ability to heat their homes and care for Missouri-based livestock,” Koster said in the release. “We are currently investigating all complaints, and working with businesses and agencies in nine other states across the Midwest to determine the cause of these price increases.”
The U.S. Energy Information Administration
attributes the Midwest price spikes to cold, wet weather this winter. Also, propane inventories in the region have dropped - by more than 2 million barrels for the week ended Nov. 1, the largest single-week stock drop in any November since 1993, according to a Jan. 23 news release from the government agency.
"Strong demand surges, low inventories and supply challenges have led several Midwest states to implement emergency measures to provide propane to heating customers, including suspensions of limitations on hours of service for propane-delivery truck drivers," EIA officials wrote in the release.
In a statement issued last week, Sen. Parson acknowledged extreme weather has been a factor in the price bumps, but he said mismanagement by the industry is the primary factor.
“When naturally occurring events such as storms and hurricanes happen, gas stations are prohibited from raising their prices to unreasonable levels,” Parson said. “This is a supply and logistical shortage brought on by the industry itself. They should not be allowed to collect excess profits from their customers due to a situation of their own making.”
Parson cited EIA data stating propane exports from the U.S. rose by 73,000 barrels a day between September and October.
"That level of exports so close to winter almost guaranteed a domestic shortage," Parson said, noting in the Jan. 23 statement the price of propane rose $1.25 to $3.55 per gallon in less than 24 hours that week.
Parson also has addressed the Missouri Senate about his concerns.
The National Propane Gas Association, a trade organization representing roughly 3,000 companies, said last week it is working to seek relief for propane customers. The NPGA also pointed to a mix of colder, wetter weather and decreasing inventories as the cause for recent spikes.
According to the NPGA, abundant grain crops were being harvested throughout the upper Midwest almost simultaneously during the fall, and with wet weather, massive amounts of propane were required to dry the crops prior to storage, which reduced propane industries across the region.
"As the harvest demand ended, a massive winter storm rolled across much of the country. Demand for residential, commercial and agricultural heat soared. The average number of heating degree days for this winter is more than 10 percent higher than last year. The forecast continues to project colder than normal weather for much of the United States," NPGA officials wrote in a statement.
