Hundreds Of Propane Customers File Price Gouging Complaints

The state has gotten hundreds of complaints from propane consumers. Now the Attorney General's Office is investigating.

  • Propane tank

    Image 1 of 2

    Photo: Bill Shaw - WTIU News

    Propane consumer, Beth Sluys, filed a complaint with the Indiana Attorney General's office after she was charged almoost $1,600, or $7.14/gal, for her propane this winter.

  • Propane Price Graph

    Image 2 of 2

    Photo: Scott Carmichael - WTIU

    These numbers show indiana propane prices from 2009 to today. The price hit $4.26/gal at the height of the shortage. At that same time is when Beth Sluys was charged $7.14/gallon.

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.

IND_Propane Price Gouging

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

Alex Dierckman

Alex Dierckman is a reporter and anchor for WFIU/WTIU News and Indiana Newsdesk. She has been with the station since 2012. From Carmel, Indiana, Alex is excited to report and deliver the news in her home state. You can follow her on Twitter @alexdierckman.

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