The U.S. Census Bureau reported in the "2005 American Community Survey" that more than 65,000 Nebraska households rely on propane to heat their homes. In the “Short-Term Energy Outlook” released on October 10, the Energy Information Administration projected that Nebraskans will see slightly higher propane expenditures this winter compared to last winter due to increased consumption resulting from colder weather.
On October 16, 2006, the average residential propane price had fallen more than one cent from last week to $1.41 per gallon (see the table at the end of this report). Last week's price was revised by one-tenth of one cent to reflect no change from the prior week. 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 seven cents (or 4.6 percent) lower than the price at this time last year.
Other states in the Midwest Region had higher prices ranging from $1.45 to $1.95 with the region averaging $1.73 per gallon. States adjacent to Nebraska, such as South Dakota, Iowa, and Missouri, had prices of $1.47, $1.48, and $1.62, respectively.
While wholesale prices had risen more than two cents this week and the rack-to-retail margin decreased to 41 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 just above the normal range for this time of year with 26.4 million barrels in storage on October 13.
Notes: The annual report for the 2005-2006 winter season is available. An archive houses annual reports from previous years.
The Nebraska Energy Office has participated in the State Heating Oil and Propane Program for six 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.