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Photo: Bill Shaw - WTIU News
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Photo: Scott Carmichael - WTIU
The cold winter and low supply of propane has meant high prices for a lot of customers, and some complaints of price gouging.
The Indiana Attorney General’s Office is investigating these claims after receiving hundreds of complaints.
Beth Sluys heats her small home in rural Bloomington with propane. She keeps her thermostat set at 65 degrees to try and conserve. When her tank gets down to about 30 percent full she calls and places and order for more.
At the beginning of February, Sluys called Ferrellgas in Ellettsville and ordered a refill. It would be $2.89 a gallon. When the truck delivered the gas about two weeks after she paid for it, the driver forgot to leave a receipt so Sluys called the gas company.
“She told me that my gas bill was going to be close to $1,600 for that delivery and that it was $7.14 a gallon,” she says. “And when I had paid for it, it was $2.89 a gallon. So I just I just hung up, I was in shock, I hung up the phone.”
Sluys filed a formal complaint with the Indiana Attorney General’s office.
Hers, as it turns out, is one of more than 500 price gouging complaints the Attorney General’s office has gotten this year. Deputy Director Of Community Protection for the Indiana Attorney General’s office, Terry Tolliver, says there is a statewide investigation in progress.
“It would be wrong for a company to just charge whatever it wanted to in order to basically force consumers to make a choice between having heat or saving the money,” he says.
Ferrellgas in Bloomington reduced Beth Sluys’ bill back to the initial billing price after her conversation with them.
Propane Prices from 2009 through early 2014
Propane prices shattered records this winter.
The graph below shows average residential market prices for a gallon of propane in Indiana from the 2004 to today. The height of the shortage hit on Feb. 3 when prices hit $4.26 per gallon. Around that same time is when Sluys was charged $7.14 a gallon.
In response to the allegations, Ferrellgas said in a statement:
“Many throughout the country who rely on propane to heat their homes have paid more for propane this winter than they have in recent years. The higher prices are the result of several factors, including record agricultural propane use in the fall that lessened inventories heading into the winter months, increased propane usage this winter as a result of below-normal temperatures in many parts of the country, and infrastructure realignments that inhibited the transportation of propane.
“As a result of these factors, the retailers that supply the nation’s residential, industrial/commercial, and agricultural propane users paid record-high prices for propane on the wholesale market. As middle men in the propane supply chain, retailers then passed on higher prices to consumers. At its peek, a gallon of propane on the wholesale market at Conway, Kansas, one of the country’s major propane supply points, was selling at nearly $5 per gallon.
“The price area retailers pay for propane depends on when the propane is purchased and the supply point it’s purchased from. Given the wild fluctuations in the wholesale price of propane this winter, and given the supply challenges that have forced propane retailers to secure propane at non-typical supply points, it’s possible that the price per gallon retailers are charging on any given day is different from retailer to retailer.
“Nearly half of Ferrellgas’ Customers in Indiana entered into price-protection contracts with us prior to the heating season and paid well below market price for their propane this winter. We’re proud to honor our commitments to these Customers at a time of such volatility in the wholesale propane marketplace. Those who did not enter into contracts are currently paying more for propane than they have in previous years.”
- Scott Brockelmeyer, Vice President, Communications and Marketing at Ferrellgas