Report: Winter propane price spikes caused by market forces

In a report attempting to determine whether price gouging caused a spike in propane prices this winter, Missouri Attorney General Chris Koster's office found market forces were the cause.

The report follows January requests from Sen. Mike Parson, R-Bolivar, and Rep. Jay Houghton, R-Martinsburg, who each formally requested Koster's office investigate the possibility of price gouging. Consumers in the Show-Me State reported propane prices spiking from less than $2 per gallon in December to over $5 per gallon in January, according to a news release.

Koster's report found the combination of a wet and late corn harvest, an unusually cold and early winter and record propane exports that reduced domestic inventories joined together to deplete inventories this winter in the Midwest. Unable to meet demand, the market responded with record price increases.

“While our investigation concludes that market forces drove higher propane prices, we are still actively responding to complaints from Missouri propane consumers on a case-by-case basis,” Koster said in the release. “My office will continue to examine each circumstance to determine if propane suppliers violated Missouri consumer protection laws during this period of price instability.”

During the review period, Koster's office examined some 250 complaints and interviewed around 80 consumers. Many of the complaints claimed retailers failed to honor prepurchased pricing contracts or added rush delivery fees to orders. To date, Koster's office has recovered more than $3,000 for Missouri propane customers and continues to work with others regarding complaints.

In Missouri, over 200,000 households rely on propane as their primary residential heating fuel. To protect against possible future price increases, Koster recommends Missouri propane customers:

• consider a prepurchased contract or maximum price plan;
• shop around and research the supplier's track record; and
• research whether to own or lease a tank.

[[In-content Ad]]