On December 19, 2005, the average residential propane price had increased five cents from last week to $1.51 per gallon (see the table at the end of this report). The graph below this text shows the spread in prices from month to month and from this year compared to previous years. This week's average price was 26 cents (or 21 percent) higher than the price at this time last year.
Other states in the Midwest Region had higher prices ranging from $1.54 to $2.13 with the region averaging $1.83 per gallon. Kentucky and Ohio continue to have average prices over $2 per gallon. Ohio's average has been over $2 a gallon for the tenth consecutive week. States adjacent to Nebraska, such as South Dakota, Iowa, and Missouri, had prices of $1.56, $1.54, and $1.71, respectively.
While wholesale prices rose almost four cents per gallon this week and the rack-to-retail margin increased to 34 cents, Nebraska retail prices continue to be the lowest of the surveyed states in the region. (Nebraska does not have the lowest wholesale prices of the surveyed states in the region.)
On the supply side, the Midwest Region inventory level was at the bottom boundary of the normal range for this time of year with 20.4 million barrels in storage on December 16. The Midwest reported the largest regional decrease in inventories this week. Inventories dropped 1.9 million barrels due to cold temperatures in the Midwest. The Energy Information Administration projects that, even if this trend of sharp declines continued each week through the end of the month, propane inventories would still maintain the modest inventory cushion that was built up during the months of October and November.
Notes: The annual report for the 2004-2005 winter season is available. The archive houses annual reports from previous years.
The Nebraska Energy Office has participated in the State Heating Oil and Propane Program for five years. During the heating season (October to March), the staff contact companies each week who supply propane to Nebraska, collect Monday's retail price, and submit the data to the Energy Information Administration. The Energy Information Administration calculates the average price shown in the table below.
In the Midwest Region, Nebraska's average residential propane price was the lowest price each week during the last five heating seasons. The Energy Information Administration theorized that this was due to minimal transportation costs since Nebraska's wholesale prices were not the lowest in the region each week. Another reason would be the number of participating states. Since state participation in the program is voluntary, propane prices were not surveyed in each state in the Midwest Region. Kansas and Oklahoma might also have had low prices--possibly lower than Nebraska's because the two states are closer to production, refinery, and storage areas.
During the off season (April through September), the Nebraska Energy Office staff continue to contact the same suppliers who were contacted during the heating season. Staff contact suppliers once a month instead of once a week since the price of propane is usually not as volatile during the off season. The Nebraska Energy Office staff calculate the average price, shown in the table below, from the suppliers' retail prices on the first Monday of the month.
State Heating Oil and Propane Program
The Energy Information Administration, the independent statistical and analytical agency within the U.S. Department of Energy, conducts the State Heating Oil and Propane Program from October to March--the heating season--each year. The Energy Information Administration collects prices for the program each week from participating states and calculates a state average price, a regional average price, and a national average price which can be seen in the report Residential Propane Prices by Region and State.
For statistical purposes, the Energy Information Administration defines the Midwest Region to include the states of Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, and Wisconsin.
The prices represent average home heating charge prices for delivery of consumer grade propane, excluding taxes and cash discounts.