Heating fuel prices spike as demand stresses delivery systems

The latest winter freeze has contributed to a rise in prices of natural gas and propane, with some customers paying up to $200 more to fill up their home tanks than they did last month
The latest winter freeze has contributed to a... 01:49

CHICAGO -- Propane trucks are crisscrossing the Midwest, distributing fuel to customers from stocks that are now half of what they were last year.

Jeff Petrash is vice president of the National Propane Gas Association.

Jeff Petrash CBS News
"It's operating, but under considerable stress," said Petrash. "The problem really is that we have to get the propane where it's needed."

According to Energy Department figures, more than 7 million households rely on propane for heat. Some customers may be paying up to $200 more to fill up their home tanks than they did just last month.

For natural gas, which heats more than 55.6 million households, market prices are up more than 8 percent in the last two days.

Phillip Streible CBS News
Phillip Streible is a market analyst.

"Prices - I believe they'll top out and will start to come back down. But I would still expect that next bill is probably going to shoot up on most of the consumers," said Streible, when asked if the high prices are based on long-term effects or due to the winter.

New drilling techniques have increased production to record high amounts, but pipeline production has not grown as fast, causing price spikes in parts of the country.

And while the amount of natural gas in underground storage is roughly the same as a decade ago, we are now withdrawing almost double the amount as we once did.

To give another measurement of this winter's impact, the week ending Jan. 10 saw the largest withdrawal of natural gas from storage facilities in 20 years.

  • Dean Reynolds
    Dean Reynolds

    Dean Reynolds is a CBS News National Correspondent based in Chicago.