I’m a recent arrival here in the state of Delaware, coming from the D.C. metro area, so I’m not used to everything running on propane to such an extent that there are propane trucks all over the place, big propane tanks in every yard and a handful of propane companies in the business.
Now I’m a propane kinda guy. But there are some oddities about the propane business that have become apparent to me during my first two winters here.
Most notable, the consumer doesn’t seem to have much freedom of choice. This is because the propane company owns the tank on your property. No other company will fill your tank. If you are unhappy with company A, or if someone else has a better price, you have to pay Company A to remove their tank, and they will reimburse you mere pennies on the dollar for any gas remaining. (They then sell it to the next guy for full price). Then you have to pay company B to install another tank exactly like the old one, and agree to buy propane only from them at a price they determine. This type of forced marriage between consumer and supplier rarely works for the benefit of the consumer.
Technically, the consumer is free to choose, but it’ll cost a lot of money to make the switch. I would surmise most people, once they sign up, are customers for life. How does this situation foster any sort of real-time competitiveness in terms of service or price?
During the recent cold snap, my propane company took six days to come and fill up my tank, after daily calls for service. I signed up for automatic delivery, which is supposed to keep me supplied, but no matter. I got by with electric space heaters and lots of sweaters and blankets. By the time they finally got here, the worst of the cold was over. If this were a free market, I would have called around until I found someone who could accommodate me.
But I couldn’t do that because no propane company will touch someone else’s tank. And if you’re not happy with the service, well, that’s just tough. This is preposterous and makes no sense for the consumer. Imagine if Safeway or Giant owned your refrigerator and forced you to buy everything from them.
I had oil heat back in Maryland, but I owned the tank and could switch oil providers at any time without paying any penalties. I own the gas tanks in my car and I’m free to buy gasoline anywhere I choose.
I can choose electricity suppliers as well and there’s no fee for switching. But propane lives in a world removed from any real choice. The consumer can’t shop around for the best price. I had to agree to a fixed price per gallon since that was the only option. So if the market price goes up, that’s good for me but if it goes down, I pay higher than market price.
The propane industry here in Delaware appears to be a cartel, defined as “a group of businesses or nations that collude to limit competition within an industry or market.”
Am I the only one who has noticed this? Or does everybody just think it’s normal because that’s the way it’s always been?
I hope my propane company doesn’t read this and raise my rate.
Ab Ream
Millsboro
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