Propane prices, demand continue to concern customers

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KANSAS CITY, Mo. - Missouri Attorney General Chris Koster is investigating the dramatic rise in the price of propane. Some customers have complained prices went from less than $2.00 a gallon in December to about $5.00 a gallon recently.

One local expert says there's a logical explanation for the price increase, but prices won't go back down until after the worst of the cold. The propane problem has swept the whole Midwest. In the St. Louis area, Catherine Rankovic struggles with trying to fill her 400 gallon propane tank.

"I said I need $600 worth, and they said that will get you only 100 gallons and the minimum delivery is 200 gallons," Rankovic said.

She said her tank would normally cost between $600 and $800 to fill, now it will cost about $2,400.

Armada Corporate Intelligence Director Chris Kuehl says the reason there's a price hike is because there's a shortage of propane caused in part by Mother Nature.

"What we are dealing with is a shortage brought on by this nasty weather we've had," Kuehl explained.

He also says exporting propane to Europe, a bad pipeline break in Canada, and a direction change in the flow of a major propane pipeline also play a role.

Kuehl says sending supplies out to the East coast also hurts.

Kuehl explains even though Attorney General Koster is stepping in, it doesn't necessarily mean there's foul play.

"Almost every time you see high prices you will see Attorney Generals step in, sort of re-ensure the public- if there is gouging, if there is someone taking advantage of this- we will find these culprits," he said.

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  • HK

    There is no shortage, the summer and fall inventories were well above any shortage levels and could account for a very harsh winter nationwide. The truth is that the inventories were bought up and shipped to port for export to foreign countries. The price on the first of January at port was $3.43 per gallon well over the delivered price in the US.This was done by hedge fund, mutual fund and the speculator market. As a mutual fund investor said on CNBC last week, the profit in exporting natural gas will make us some profits as did propane. Natural gas is about 5.00 per cu ft and we have a market for it in China for $18.92 per cu ft. They did the same a couple of years ago when all the storage in South Dakota was bought up and shipped to Texas thus creating a shortage as the propane in transit in the pipeline in not included in inventory. And as you know when inventory seems to not be there the price goes up.

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