Effects of the propane shortage on the Midwest

WLFI File Photo
WLFI File Photo

WEST LAFAYETTE, Ind. (WLFI) – People across the Midwest are seeing a spike in the cost to purchase propane. Although it may seem like prices are being gauged, Purdue Energy expert Wally Tyner said a perfect storm created the shortage.

“It’s a double whammy of the huge amount of propane we needed to dry the corn crop plus all of the cold weather we’ve had in the Midwest and Northeast that has just sucked out the current supply,” said Tyner.

Tyner said the Midwest produces more than enough propane, but lacks the infrastructure needed to store it for long periods of time.

“We’re producing an abundance of propane, so much that we started exporting propane last year,” said Tyner.

If the price gets high enough per gallon, companies could choose to stop exporting in order to supply the Midwest, but sometimes it isn’t a choice.

If they are locked into a long term contract that says they will expert this much per month, then they have to do it,” said Tyner.

Ceres Solutions Vice President of Energy Howard Jones says prices are also up because of the cost to ship the propane from out of state, and is asking customers to try to conserve as much as possible.

“If you’re currently at 50 percent or more please don’t call your supplier wanting to be topped off. We’re trying to ration our customers, so they don’t run out,” said Jones.

Ceres Solutions is also limiting the amount customers can purchase to 200 gallons in order to help conserve. Jones says although the high prices and rationing may be an inconvenience, it is necessary for them to do their jobs.

“Our job is to not let any customer go without. That’s what we’re working feverishly and hard to do is to make sure people get gas,” said Howard.

Indiana Attorney General Greg Zoeller says market conditions have led to large price increases.

However, his office is closely monitoring the situation to make sure consumers aren’t being illegally gouged.

If you suspect price gouging, you can call the Attorney General’s Office toll-free hotline at 1-866-241-9753.

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