Why Is Natural Gas More Affordable Than Propane?

October 26th, 2017

When given the option between natural gas and propane for home heating, you might wonder what the difference is, or whether your choice really matters. These two fossil fuels differ in several ways, one of the most significant of which is their price.

Natural gas is usually far more affordable than propane, which is just one reason why most people prefer it. Find out what causes the price discrepancy between natural gas and propane so you can make an economical choice for your Pennsylvania home.

If you’re interested in switching from propane to natural gas for home heating in PA, please call UGI EnergyLink at 800-797-0712 or contact us online today!

Propane Is Processed from Natural Gas

You may not be aware that natural gas is a combination of gases, including propane, butane, ethane, and methane. Since propane is only one ingredient in “raw” natural gas, the fuel must undergo additional processing with crude oil to separate it from the other components. This leads to higher prices than leaving natural gas in its raw form.

Crude Oil Prices Affect Propane Prices

According to the U.S. Energy Information Administration, propane prices are expected to be 11 percent higher for the 2017 winter, as compared to last winter. This reflects a combination of 6 percent higher fuel costs and 5 percent higher consumption.

This year’s fuel cost increase is driven largely by higher prices for crude oil, a direct competitor of propane. Rising oil prices can be caused by everything from politics, to severe weather, to conflicts in the Middle East.

Crude oil has a more significant influence on propane prices than natural gas prices. Plus, the fact that natural gas is produced on domestic soil helps ensure steadier prices.

Propane Prices Spike During Peak Heating Season

Higher heating demand puts a strain on propane supplies. Due to the logistical difficulty of obtaining fuel for resupply during the peak heating season, propane becomes more expensive right when you need it most.

Conversely, the steady flow of natural gas from domestic sources makes it easier to meet high demand in the winter without tremendous price increases.

Propane Requires a Storage Tank Investment

Propane is sold by the gallon and stored in above-ground or underground tanks. This means when you purchase propane, you’re also paying for a container to store it in. This increases the cost of bringing the fuel to your home. Plus, you must be sure to refill the tank before it runs out or your house will go cold. If your propane tank depletes during a severe storm, you could be left without heat for days until a delivery truck arrives.

No such inconvenience exists with natural gas, which is delivered directly to your home through underground pipes.

Choose UGI EnergyLink for Natural Gas in PA

Cost isn’t the only factor that makes natural gas superior to propane for home heating. It’s also safer and more convenient because the fuel is delivered through pipes instead of being stored in an on-site tank.

If you’re ready to switch from propane to natural gas, choose UGI EnergyLink for your natural gas provider in PA. We’ll help you lock in the lowest rate possible on reliable natural gas services so you can stay warm this winter without a hike in your energy bills. With 130 years of experience, you know you can trust our ability to deliver low rates and excellent customer service.

For help switching to UGI EnergyLink, please contact us online or call 800-797-0712 today!