UGI Corporation: Potential Buy Among Future Propane Price Hikes (2023)

UGI Corporation: Potential Buy Among Future Propane Price Hikes (1)

Efficiencies and Acquisitions of UGI give it an Edge in the LPG Market

UGI Corporation (NYSE: NYSE:UGI) is a distributor of propane and other liquefied petroleum gas ("LPG") products throughout the United States and Europe. This location divide is between their four segments: AmeriGas Propane, Midstream & Marketing, UGI Utilities, and UGI International, which primarily operates within Europe.

AmeriGas Propane is the largest retail propane distributor in the United States based on the volume of propane gallons distributed annually. Their services include reliable propane storage, delivery, installation, and repair for business and residential customers. They have an outreach of nearly 1.4 million customers in all 50 states from around 1,600 propane distribution locations.

Midstream & Marketing focuses on retail energy. It sells natural gas, liquid fuels, and electricity to customers at over 35,000 locations across the United States. This segment provides midstream services and electrical generation assets. This includes creating pipeline infrastructure, pipeline integrations, and utility service development.

The UGI International segment conducts the business of LPG distribution in European countries, serving over 517,000. The UGI Utilities segment provides gas and electric services to 700,000 customers in 45 counties in Pennsylvania and one county in Maryland. The business renders electric services over 2,600 miles of transmission and distribution lines and 14 substations.

This international foothold has allowed various strategic investments through renewable gas projects and enhanced the ability to replace aging infrastructure. A series of acquisitions, debt management, customer increase, and strategic administration have allowed for enhanced performance and new projects. As of May 2022, UGI has committed to an agreement with MBL Bioenergy to fund a $70 million renewable natural gas ("RNG") project, which is expected further to develop its stance in renewables and the RNG sector.

In addition to these projects, UGI has also committed to lower costs for its production. Over the past three years cost of revenue, the total cost of manufacturing and delivering a product or service to consumers, has decreased substantially, indicating the company remains financially healthy despite its continued growth and expected advancements in ambitious ventures.

(Source: Koyfin.com)

The chart above shows that their total revenue cost has decreased year over year, even with the international event of COVID-19. This decrease has similarly allowed further expansion of distribution locations. This has allowed UGI to cushion the volatility of energy prices availability of energy products. Additional sources of cost of revenue mitigation include improved business processes which allow for increased customer conversion with less overhead. Further, UGI has developed several efficiencies related to its pipeline production and maintenance, allowing easier transactions and propane allocation. Despite an expectation in equipment costs and other critical resources due to supply chain disruptions, the business has continued to fortify and stick to its line of services and expand with target acquisitions.

Over the past year, UGI has made two notable acquisitions for more significant natural gas territory: Mountaintop and Stonehenge.

In September 2021, UGI acquired Mountaintop Energy Holdings LLC, the largest gas local distribution company in West Virginia, which served over West Virginia’s 55 counties. This includes acquiring 6,000 miles of distribution, transmission, and gathering pipelines from the firm.

This contributed to UGI’s Q4 2021 earnings report, of which core market and total gas utility volumes of UGI increased due to incremental supply from the obtained Mountaintop’s assets. This acquisition has also benefited UGI in not only regional diversification, with Mountaintop complimenting UGI’s Pennsylvania central location, but also allowed UGI to obtain 215,000 of the firm’s customers, of which 90% are residential and 10% are commercial and industrial, giving UGI further diversification into the residential space for the eastern region of the United States.

(Video) Why I Just Bought UGI Stock

In January 2022, UGI entered into a definitive agreement to acquire Stonehenge Appalachia, an investment expected to be accretive to adjusted earnings. Stonehenge’s system has 47 miles of pipeline and associated compression assets, with a gathering capacity of 130 million cubic feet per day. This has increased the expansion of midstream natural gas gathering assets within the Appalachian region, which averaged a record 31.9 billion cubic feet per day of production in the first half of 2021.

The obtainment of Stonehenge boded a margin increase to UGI’s Midstream and Marketing sector. In their Q1 2022 10-Q filing, Midstream and Marketing’s total margin had a $4 million of their $21 million increase attributed to the recently obtained company, a near 20% benefit. Additionally, this acquisition aligns with UGI’s long term strategic goals for expanding midstream assets within the Appalachian basin production region.

Further, in February 2022, UGI announced a partnership with Global Clean Energy Holdings to purchase and distribute renewable LPG. This repurchasing is primarily in California through GCEH’s biorefinery, which forecasts production at approximately 13 million gallons of renewable LPG in its first year, with AmeriGas as a long-term purchaser.

With a combination of these acquisitions that grant UGI greater LPG diversification, higher margins, the company’s decreasing costs of revenue, and its various projects for RNG development, UGI is poised for further growth and to be a primary propane provider during the winter heating season between October 2022 and March 2023.

With Supply Disruptions and Extreme Demand, the Cost of Propane is Positioned to Climb

According to the U.S. Energy Information Administration (EIA), two-thirds of the annual consumption occurs during the peak heating season (October through March), with an expectation for an increase in propane consumption for this winter.

During the peak heating season of October through March, demand is most impacted, as consumers need to heat their homes, conduct crop drying, and complete other provisional purposes. This usage is additionally reflected in UGI metrics. According to their recent 10-K, approximately 60% to 70% of annual retail propane volume for AmeriGas Propane and UGI International is typically sold during these months. Most of this is from residential impact.

Almost 6 million U.S. homes heat with propane; 4.9% of total households.

UGI Corporation: Potential Buy Among Future Propane Price Hikes (3)

(Source: Energy Institute)

It is also essential to understand that propane distribution depends on where areas propane is unavailable. Additionally, several households could prefer propane for other reasons, such as some residential homes in Texas prefer propane because ice storms frequently cause power outages. This use is reflected in its surge since their winter storm.

However, the supply chain crisis is causing propane delivery impediments, notably with delivery trucks. Out of the many parts and components that are delayed by supply chain issues, extended truck chassis causes the most trouble. The chassis is the platform on which the rest of the truck is laid on and is meant to contain parts such as the engine, tank, and batteries.

Automotive manufacturers have stated that the chip shortage is causing an issue with supplies for chassis production. This also is causing longer lead times, making materials take longer to arrive and supplies not being delivered. The president of Fisk Tank Carriers, a company that constructs this equipment, Nathan Roberts, does not expect the situation to improve this year, with forecasts of lower propane inventory and driver levels.

Another potential supply chain issue with propane is decreased natural gas and oil production. Propane is a byproduct of natural gas processing and sometimes crude oil refining. It shares a correlation with production and distribution. Due to geopolitical tensions and decreased refinery capacity, there is a continued expectation of decreased propane production, even as demand for oil has declined in the short term. Past production suffered due to COVID-19 and supply constraints in 2020 and 2021.

(Source: EIA)

While supply chain disruptions and oil capacity can negatively impact business operations for UGI and similar LPG utilities – as sufficiently disruptive supply chain concerns may lead to a limited ability to obtain additional quantities of LPG – the company has prepared for these limitations with their aforementioned acquisitions and diverse natural gas production fields. Additionally, the company benefits from seasonal favorability and winter demand. This specificity of demand is at the core of a fundamental need and is less disrupted than an industrial customer’s business activities versus the millions of individuals who rely on propane during the later seasons to survive. This favors the seasonal demand spike for UGI, even with preparation for decreasing national propane inventory.

(Video) UGI Corporation (UGI) Stock Analysis and Intrinsic Value | Buy Now or Wait?

As of June 2022, U.S. propane inventory has been below average. During the first week of March, inventory had hit its low for the year at 33.308 million barrels. Then, throughout March, April and May, the inventory builds were above average. However, this has not offset past lacking production levels. A further emphasis on the relationship between crude oil and propane. This macroeconomic volatility has further raised cause for concern in provisions for the year.

In November 2021, EIA predicted that U.S. households would spend between $1800 and $2200, depending on how cold the winter was. EIA has also forecasted that homes could see a further increase in propane prices by approximately 54% in 2022. Fluctuations, depending on the demand in winter, could range between 24% and 94% in price increase. Supplemental forecasts predict wholesale propane prices will rise as high as $2.57 per gallon.

UGI Corporation: Potential Buy Among Future Propane Price Hikes (5)

(Source: EIA)

This increase has not only affected the United States, but Europe as well. UGI International – UGI’s segment for operations in central and western Europe – is a primary LPG distributor to countries such as France, the UK, and the Netherlands. All three are among the top twenty countries in the world for LPG consumption.

Typically, the summer months have naturally lower demand for LPG products, and the season is used as a means for utility firms to replenish their storage in preparation for the winter. However, recent events have caused disruption to this usual necessary supply for citizens. The EU received 40% of its gas from Russian pipelines, and amid geopolitical tensions and Russian sanctions, the EU has been looking for more ways to find alternative sources for their energy. This is not only due to the sanctions. In last year’s heating season due to COVID-19 and supply chains weights on production, more gas than in any previously recorded year was removed from European storage, according to Gas Infrastructure Europe.

This is particularly damaging, as most consumption of LPG products like propane are for the homes of citizens. Nearly half of all propane consumption in the Europe goes toward the residential sector, the group most sensitive to the winter heating season.

(Source: Liquid Gas Europe)

Europe gas analyst Kateryna Filipenko has stated that while current storage levels have softened the impact of continuously low Russian flows, a prolonged disruption could lead to significantly higher gas prices and potentially zero storage. Furthermore, with the current need for European utilities to start utilizing their reserves typically meant for the peak heating season, satisfactory levels for gas are unlikely to be reached.

(Source: Gas Infrastructure Europe)

However, UGI International is sufficiently prepared to contend with the ongoing shortage. While business risks are the same as their operations in the United States – with LPG shortages making disruptions in energy distribution and operational difficulties – their segment in Europe holds additional benefits, with half of its supply coming from regions near Norway and the UK. In addition to their investments in their infrastructure to conduct more successful storage and distribution operations, the company holds not only a sizable internal foundation, but an advantage with diversification as well, operating in 17 countries across Europe. If the firm can meet the significantly higher demand for propane and other LPG products in Europe, UGI could benefit greatly in terms of earnings.

With UGI as not just a primary distributor in the United States and Europe, but also having a record of effectively handling supply chain concerns through natural gas resource diversification and improved business processes, they could be a key figure in taking advantage of a propane price increase for the oncoming winter.

Valuation

With a compelling case for seeing a propane price increase in the next six months, one may want to compare LPG utility equities to find one with the best performance. Despite its current downtrend year over year, UGI is showing vital valuation metrics compared to its fellow U.S.-based utility peers. We have compared its valuation with other U.S.-based, mid-cap utility competitors – Chesapeake Utilities Corporation (CPK), ONE Gas (OGS), Southwest Gas Holdings (SWX), and New Jersey Resources Corporation (NJR) – specializing in propane and LPG products. Our comparison metrics are the Price-to-Sales (P/S) and Price/Earnings-to-Growth (PEG) ratios.

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(Source: Koyfin.com)

Factors contributing to this advantage for UGI are their acquisitions, customer base, international reach, and systematic improvements.

While CPK and SWX have also recently completed acquisitions, neither hold as much significance as UGI’s. CPK’s acquisition of Davenport Energy only added 850 customers and around 406,000 gallons of propane annually, compared to the thousands of customers and expansion of operations Stonehenge and Mountaintop added.

There is also the focus on international exposure for customer reach that none besides UGI has. CPK is focused within Delaware and Maryland, with 74,000 customers. OGS provides service to around 2 million customers based primarily within Oklahoma, Kansas, and Texas. SWX holds similar numbers for their Arizona, California, and Nevada areas. Finally, NJR is wholly focused on New Jersey, with half a million customers throughout their various counties. UGI holds not only a higher diversification across the states but a European reach as well. This reach of operations has allowed them to maintain significantly higher revenue as they hold operations within European countries whose primary LPG demand goes to their residential heating, which, as noted, is one of the most significant drivers of sales during the peak heating season for LPG utilities.

(Source: Koyfin.com)

UGI also holds an advantage in systematic operations through its constant business transformations. This includes attraction through renewable-based LPG resources, addressing emissions, and putting forth $276 million for the fiscal year 2022 to continue to provide safe and reliable service. According to their most recent 10-Q, by the end of Fiscal 2021, AmeriGas Propane and UGI International substantially completed their previously announced business transformation initiatives. Benefits are to be recognized in Fiscal 2022. This was in line with their previous year's agenda, as in Fiscal 2020, the business initiated a transformation project focused on corporate support functions such as finance, human resources, and information technology, rolled out with new infrastructure projects.

A potential complication is that this infrastructure expansion could be a severe future downside compared to its peers. The company's current focus is further pipeline construction and gathering systems for natural gas to allow for further expansion. However, these are vulnerable to several regulations, which could delay production or cause projects not to be completed in line with the business's budget. However, UGI has shown a proven history of project completion and is a business that can meet its obligations, and its acquisitions have allowed a decrease in total debt. Additionally, UGI has shown a history of reliability and customer satisfaction. In April 2021, UGI received an award recognizing it as the “Easiest to do Business With" firm among 38 utility companies nationwide.

Another impediment compared to its competitors is the global operational risk. Due to macroeconomic concerns, the company is more exposed to vulnerabilities in Europe. Their operations could be impacted due to geopolitical risk and other obstructions their more U.S.-centric competitors do not have. Nevertheless, with the expectation that propane can aid Europe's continued plan to maintain sanctions and further draw away business from Russia, the benefits may outweigh the risk.

We believe these unique international capacities, consistent growth, and business transformation advantages justify our valuation of UGI over its competitors, primarily due to shifting energy markets and expected demand.

Conclusion: Enter Long, but Expect Volatility

We assert that recent volatile energy events and seasonality have caused UGI's price to decline, but the stock has space and future possibilities to see a rebound. Paired with its continuous decrease in the cost of revenue, future capital obtainment, as well as its improving business processes and future projects for increased international distribution, we expect a rise in price as seasonality returns and the demand for propane and other LPG products becomes higher with this oncoming winter, due to a need for heating and appliances. Further, their acquisitions provide more ground for operations, and with initiatives met in emissions, customer satisfaction, and deliverables where even if a catalyst does not deliver on the expected extremities, the company is further poised for further growth through the end of 2022 and into 2023. Holding the largest U.S. propane distributor and an international advantage against its peers, the company's diversified operation sections can often mitigate potential risks. The company is in no financial distress and expects comfortable growth throughout the year, an expectation which is paired with an increase to its dividend to $0.36 with a yield of 3.2% as of this July.

However, volatility should be repeatedly addressed. Even major projects and acquisitions could not account for a sufficiently extreme change in the crude oil and natural gas sector, to which UGI is sensitive to movements. Despite crude oil remaining over $90 a barrel, the current geopolitical sphere is in a susceptible state, and recent developments in demand could poise for a decrease in the asset. We propose a risk-adjusted long position and waiting period throughout the month as the winter heating season draws near to decide on further allocation. Additionally, while demand in the intermediate may not be sated, there are potential short-term discrepancies that could temporarily control inventory levels and mitigate supply chain difficulties. Further fluctuation is expected, and an investor should proceed with caution.

We would like to thank J. Carlen for his contribution to this piece.

This article was written by

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Long/Short equity and commodities analysis specializing in strategic opportunities in both domestic and international markets. Research articles written in collaboration with current TrendUp Finance participants.

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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FAQs

Does propane have a future? ›

The fact that approximately 50% of the U.S. population now resides in a state with comprehensive carbon emissions regulations or pending legislation may also make propane a more attractive energy source. By some estimates, the global propane market could reach 212.8 million tons by 2027.

What is the current price of propane per gallon in Minnesota? ›

Stats
Value from Last Week2.145
Value from 1 Year Ago2.254
Change from 1 Year Ago-4.17%
FrequencyWeekly
UnitUSD per Gallon
3 more rows

What is the current price of propane in Wisconsin? ›

Basic Info. Wisconsin Residential Propane Price is at a current level of 2.08, down from 2.083 last week and down from 2.241 one year ago. This is a change of -0.14% from last week and -7.18% from one year ago.

What gas is propane? ›

Also known as liquefied petroleum gas (LPG) or propane autogas, propane is a clean-burning alternative fuel that's been used for decades to power light-, medium-, and heavy-duty propane vehicles. Propane is a three-carbon alkane gas (C3H8). It is stored under pressure inside a tank as a colorless, odorless liquid.

Are propane prices expected to rise in 2022? ›

EIA has also forecasted that homes could see a further increase in propane prices by approximately 54% in 2022. Fluctuations, depending on the demand in winter, could range between 24% and 94% in price increase. Supplemental forecasts predict wholesale propane prices will rise as high as $2.57 per gallon.

Are propane prices expected to rise in 2023? ›

The United States Energy Information Administration (EIA) forecasts that a variety of U.S. energy prices will remain historically high through 2023, including oil, natural gas, coal and electricity, according to EIA's June 2022 "Short-Term Energy Outlook (STEO)".

What is the future of propane prices? ›

Forecasts predict propane prices will rise as high as $2.57 per gallon in 2022. Correspondingly, U.S. households that heat their homes with propane will likely see their heating costs increase by approximately 54% in 2022. They could spend up to 94% more in a very cold winter or only 24% more in a mild winter.

Should I lock in my propane price? ›

Lock in Your Rate

Lock in once a year, and you will always know how to budget correctly for propane. If possible, lock in your prices during the summer, when you can usually get the best deal. Set a reminder on your calendar so you don't forget to call and check rates.

What month is best to buy propane? ›

The cheapest time to buy propane lies between late September to early October. The reasons that propane becomes inexpensive during this time are: Stable weather conditions. Low demand.

How long does 500 gallons of propane last for a house? ›

A 500-gallon tank holds 400 gallons of propane and can last several months, ranging between 2 to 14 months. On average, homeowners can expect that the tank will last around 5 months with regular use of appliances.

Which propane company is the cheapest? ›

What is the cheapest propane company?
CompanyFirst fill (dollars/gallon)Next fill (dollars/gallon)
Amerigas1.6992.099
Ferrellgas1.4992.370
Suburban Propane1.7992.599

How much does it cost to fill a 500-gallon LP tank? ›

In short, filling a 500-gallon propane tank costs anywhere from $600 to $1,600 (for $1.50/gallon to $4.50/gallon propane prices).

Is it cheaper to heat with propane or natural gas? ›

That means, propane is more than twice the energy of natural gas. While the cost per gallon is less for natural gas, you'll use more of it to heat the same appliances. If you get two times the heat from propane, naturally, you'll use less fuel. In this combined round, propane wins for efficiency and overall cost.

Is it cheaper to use natural gas or propane? ›

Propane is more expensive than natural gas but natural gas burns much faster than propane. In fact, it burns at a rate of two to one. This means that to heat two spaces of the same size, you'll use twice as much natural gas than propane.

How much propane is left in the world? ›

How to Tell How Much Propane Is Left for Your Gas Grill - CHOW Tip

Should I buy propane now or wait? ›

Buy During the Warmer Months

Propane prices can be up to a dollar cheaper in the warmer months as compared to the winter season. Some companies, such as Diversified Energy, offer price protection so you can get the propane you need at a comfortable cost.

Is propane cheaper than electricity? ›

Compared with electric heat, propane is better in so many ways: Propane is cheaper than electric: According to the U.S. Department of Energy, heating a home in the U.S. with a propane heating system in recent years has cost far less than heating with an electric system.

What is the average price of propane in the US? ›

US Residential Propane Price is at a current level of 2.664, down from 2.665 last week and up from 2.657 one year ago. This is a change of -0.04% from last week and 0.26% from one year ago.

Will energy prices go down in 2023? ›

WASHINGTON, Oct 26 (Reuters) - The World Bank on Wednesday said it expects energy prices to decline by 11% in 2023 after this year's 60% surge following Russia's invasion of Ukraine, although slower global growth and COVID restrictions in China could lead to a deeper fall.

Will there be a propane shortage this winter? ›

Supplies may be somewhat limited, and it's likely (and almost inevitable) that the prices will be higher in the winter of 2021. Homeowners and RVers who rely on propane should prepare for this situation and possibly consider switching to alternative energy methods that will be more sustainable.

What will be the price of natural gas in 2023? ›

The EIA estimates that the wholesale spot price of natural gas at the U.S. benchmark Henry Hub will average $3.92 per million British thermal units (MMBtu) in 2022, an 8-year high, and will average $3.60/MMBtu throughout 2023.

Do Oil prices Affect propane prices? ›

Approximately 70 percent of the U.S.'s propane comes from natural gas processors, but LP gas competes more closely with the other byproducts of crude oil. Therefore fluctuations in the price of crude oil are reflected in the wholesale propane price.

Is propane price tied to natural gas? ›

Because propane is a byproduct of natural gas processing and sometimes crude oil refining, the price of propane falls between those two commodities.

How many gallons are in a 20 lb propane tank? ›

20 pound propane tanks are often referred to as grill cylinders and hold 4.6 gallons of propane when full.

How much does it cost to fill a 500 gallon propane tank in 2022? ›

It costs anywhere from $600 to $1,600 to fill a 500-gallon propane tank. Keep in mind that tanks can only hold up to 80% capacity due to the propane expanding when temperatures increase.

What is the current price of propane in Michigan? ›

Stats
Value from Last Week2.506
Value from 1 Year Ago2.435
Change from 1 Year Ago1.97%
FrequencyWeekly
UnitUSD per Gallon
3 more rows

How can I lower my propane bill? ›

Twelve Tips For Saving Money on Propane Heat
  1. Door Snakes. Don't let heat escape through drafty doors. ...
  2. Lock the Windows. ...
  3. Regulate Your Thermostat. ...
  4. Weatherstrip Your Windows. ...
  5. Buy Energy-Saving Curtains. ...
  6. Plug Holes in Exterior Walls. ...
  7. Consider Using a Space Heater. ...
  8. Cover Windows With Plastic Film.
6 Nov 2017

What is the current price of propane per gallon in Indiana? ›

Basic Info. Indiana Residential Propane Price is at a current level of 2.521, unchanged from 2.521 last week and up from 2.472 one year ago. This is a change of 0.00% from last week and 1.98% from one year ago.

How much propane does furnace use? ›

The average home furnace runs on roughly 100,000 BTUs, and one gallon of propane equals 92,000 BTUs. That means the average home furnace burns roughly one gallon of propane per hour.

How much is propane per gallon in Indiana? ›

What today's propane price per gallon means for you
State300 gallons today ($)300 gallons last year ($)
Indiana (IN)618.90549.90
Iowa (IA)457.50407.70
Kentucky (KY)616.80610.20
Michigan (MI)607.20583.20
21 more rows

Is it cheaper to heat with propane or oil? ›

As a general rule of thumb, propane is cheaper per BTU than heating oil.

How much propane does it take to heat a 2000 square foot house? ›

A 2,000 square foot home in a “mild” climate—think of the deeper southeast or southwest United States—would require approximately 2 million BTUs of propane and cost about $76 on average per month to heat.

Can you negotiate propane prices? ›

Negotiating your Propane Price

Propane is negotiable and you can almost certainly get a better price by giving your provider a call.

How much does it cost to fill a 1000 gallon propane tank? ›

How Much To Pay For Propane Tank Refilling? ( Chart)
Propane Tank Size (Gallons):Refill Cost (At $2.00/Gallon):Refill Cost (At $2.86/Gallon):
250 Gallon$400.00$572.00
500 Gallon$800.00$1,144.00
750 Gallon$1,200.00$1,716.00
1000 Gallon$1,600.00$2,288.00
3 more rows

How long does a 250 gallon propane tank last for a house? ›

A 250-gallon propane tank lasts for anywhere between 26 days to 7 months and 2 days. That's quite a wide range. The longevity of a 250-gallon propane tank depends on use (how much propane per day you burn). This is indirectly connected with how big a house you want to heat with a 250-gallon propane tank.

How long will 400 gallons propane last? ›

Based on average estimations, we know that a 1,500 sq ft will burn through 510 gallons of propane in 6 winter months. We also know that a full 500-gallon tank contains 400 gallons of propane. Here's how we can calculate that: 510 gallons of propane will last for 6 months.

Is propane more efficient than gasoline? ›

Because a gallon of propane has 27% less energy than a gallon of gasoline, the fuel economy of propane vehicles is slightly lower. However, propane has a higher octane rating than gasoline (104–112 compared to 87–92 for gasoline), and some OEMs offer dedicated engines optimized to take advantage of this higher rating.

How much does it cost to fill a 100 gallon propane tank? ›

Refilling a 100-gallon tank will cost on average $500

Costco is often considered one of the cheapest places to exchange a 20 lb tank. For larger propane tanks that require refilling onsite, many refilling companies will charge a delivery and refilling fee per gallon that is often factored into the 'per gallon' cost.

Will propane ever be banned? ›

The CA State Assembly voted this week to ban the sale of single-use one-pound propane canisters and Governor Gavin Newsom is expected to sign the bill (SB 1256) as soon as it reaches his desk. The ban takes effect in 2028 giving manufacturers and retailers time to scale up refillable propane canister options.

How long will propane be around? ›

A propane shelf life of 30 years or more would not be an unreasonable expectation, as LPG-propane does not go bad or off. Different from fuel types that degrade with time, like gasoline and diesel, propane fuel does not expire nor does its effectiveness deteriorate with time.

Is the propane industry growing? ›

Market Synopsis. The global propane market size reached USD 81.40 Billion in 2021 and is expected to register a revenue CAGR of 4.7% during the forecast period. Rising need for clean-burning fuels due to increasing environmental concerns is a key factor expected to drive revenue growth of the global market.

Will the world ever run out of propane? ›

The short answer: yes. Kerosene and propane are both created by refining crude oil and natural gas. So yes, they are also non-renewable resources.

What is the future of propane prices? ›

Forecasts predict propane prices will rise as high as $2.57 per gallon in 2022. Correspondingly, U.S. households that heat their homes with propane will likely see their heating costs increase by approximately 54% in 2022. They could spend up to 94% more in a very cold winter or only 24% more in a mild winter.

What will replace propane? ›

If you are in search of a gaseous replacement for natural gas, biomass is an option. Specifically, biomass is a great alternative if you live in a rural area and it's difficult to access natural gas or propane. Biomass can heat appliances and act as a portable cooking source if you're a camper.

Is propane cheaper than gas for heating? ›

Cost. If the natural gas price is $15.00 per 1,000 cubic feet, the same $15.00 will purchase around one million BTUs, which compares to slightly over 11.20 gallons of propane. If propane costs $2.50 per gallon, using this as an example, natural gas is the cheaper option.

Should I lock in my propane price? ›

Lock in Your Rate

Lock in once a year, and you will always know how to budget correctly for propane. If possible, lock in your prices during the summer, when you can usually get the best deal. Set a reminder on your calendar so you don't forget to call and check rates.

How much does it cost to fill a 500 gallon propane tank in 2022? ›

It costs anywhere from $600 to $1,600 to fill a 500-gallon propane tank. Keep in mind that tanks can only hold up to 80% capacity due to the propane expanding when temperatures increase.

Is electric heat cheaper than propane? ›

Propane is cheaper than electric: According to the U.S. Department of Energy, heating a home in the U.S. with a propane heating system in recent years has cost far less than heating with an electric system.

Who is the biggest propane company in the United States? ›

AmeriGas Propane

Who uses the most propane? ›

In the United States, 47 million people use propane for grills and 14.3 million households run on propane (about 4.5% of the population).
...
Usage distribution.
Residential14.3 million users
Grill users47 million users
7 more rows

Is propane a good energy source? ›

Propane has the lowest carbon content of any fossil fuel, so using propane minimizes carbon monoxide, hydrocarbon, and greenhouse gas emissions. Compared to electricity, which is ultimately powered by coal or nuclear power, propane is a much cleaner energy source.

Which propane company is the cheapest? ›

What is the cheapest propane company?
CompanyFirst fill (dollars/gallon)Next fill (dollars/gallon)
Amerigas1.6992.099
Ferrellgas1.4992.370
Suburban Propane1.7992.599

Will gas furnaces be phased out? ›

In its ongoing effort to slash ozone pollution, the California Air Resources Board (CARB) voted Thursday to ban the sale of new gas furnaces and water heaters beginning in 2030. Homes will be required to install zero-emissions alternatives, like electric heaters.

How many years of gas is left in the world? ›

The world has proven reserves equivalent to 52.3 times its annual consumption. This means it has about 52 years of gas left (at current consumption levels and excluding unproven reserves).

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