A tough winter could lie ahead for the 5% of American households that heat their homes with propane. The fuel has hit its highest price for this time of year in a decade, meaning millions of rural households will experience "sticker shock" when it's time to fill up their tanks, the Wall Street Journal reports. The wholesale price of propane is currently around $1.60, more than double the price of a year ago, according to the Energy Information Administration. The EIA predicts that consumers in the Northeast are likely to pay an extra $2,000 to stay warm this year—but their bills could almost double if this winter ends up being 10% colder than forecast.
The US is the world's largest exporter of propane, but supply is currently so tight that research firm IHS Markit warns that the market could be headed for "armageddon" this winter, Bloomberg reports. Robert Stier, lead petrochemicals analyst at S&P Global Platts, tells the Journal that strong demand for propane from overseas—including China, where it is used to make plastics—kept prices high through the summer, giving traders little incentive to stockpile the fuel for winter as they would in a normal year.
Stier warns that domestic propane inventories are so low that there may be times when propane is unavailable at any price. "You have no alternative for heat," he says. "Your options: Turn down the thermostat, put on a sweater, or burn wood in a fireplace." Dozens of senators have asked the Biden administration to boost funding for a Health and Human Services Department program that helps low-income families and seniors with their energy bills. (More propane stories.)
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