If you need to purchase or rent a tank Cleveland Petroleum Products can help you.
Call our office for more info – 918-358-3310
Some guidelines if you’re adding propane to your heating solution.
Wondering what goes into propane prices and why it fluctuates a lot?
Here’s an except from propane101.com
Your Propane Price
Your price for propane is primarily a function of the market and demand but dealers have variable costs and fixed costs they have to cover to continue to operate their business. Many propane users don’t understand the requirements imposed on propane companies by local, state, and federal government. These requirements include but are not limited to:
- Hazardous materials reporting and compliance training
- Company licensing fees administered by state propane regulatory agencies
- Employee background checks – You probably didn’t know that propane delivery drivers are required to have a background check performed by the FBI. These background checks are not cheap.
- Driver qualification requirements filing and reporting for the US Department of Transportation
- Department of Homeland Security requires security and emergency plans submitted routinely
- OSHA compliance measures for workplace safety
- Many states collect fees for commercial and other types of installations
- Fire safety audits and disaster response plans submitted to state and Federal agencies
- Terrorism training and anti-terror compliance measures for propane tank installations meeting Federally mandated thresholds
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One of the largest expenses a propane company has is insurance. In order to be insured, a propane dealer must provide evidence of compliance for the above in addition to many other requirements imposed by the underwriter. Without insurance, a propane company will lose its license and cease operation. And just like any other business, propane dealers have fleet maintenance expenses, payroll, taxes, fuel costs, and numerous other operational costs so contrary to popular belief, the market price for propane subtracted from the dealer price is not purely profit. That’s just what’s left over for the dealer to operate the business with. The profit, if any during some years, is what’s left over after operational expenses are paid.