Demand Up, Supplies Short, Causing Spike in Propane Prices

By John McDevitt

VALLEY FORGE, Pa. (CBS) -- There's a nationwide propane shortage, with the extreme cold across much of the nation causing propane heating costs in select areas to rise.

Industry professionals say the propane supply is low mainly because of the weather: a wet autumn had farmers in the midwest drying corn crops with propane, and the harsh winter has had customers with propane heat cranking up their thermostats.

There  are other factors, such as exports and pipelines that have been down for maintenance, which has added to higher costs is the midwest and northeastern parts of the country.

Simon Bowman is a spokesman for Amerigas Propane (with corporate offices in Valley Forge), the largest propane retail distributor in the United States.

"It's important to remember that wholesale prices -- the price we buy propane at -- is up 60 percent plus from a year ago, and that's due to numerous reasons, both supply and demand," he told KYW Newsradio today.  "But wholesale prices are up.  And then, due to this intense demand, retail prices are up as well."

Bowman says Amerigas is managing to meet demand in most areas but there are some areas where  rationing is being conducted.  That may be require closer customer monitoring of tank levels.

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