Shortage of propane tanks due in part to high demand by businesses
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LOS ANGELES (NewsNation Now) — Outdoor dining restrictions caused by the coronavirus pandemic have become a factor linked to propane cylinder shortages and a significant surge in demand.
Higher prices for propane gas has cut into the bottom line for restaurant operators like Roberto Espinoza. With piling bills and pandemic restrictions on operations, breaking even is even harder.
“It’s huge, it’s adding at least $200 a week just for rotating the heaters every day,” Espinoza said. “Since COVID started, it’s about closing the place, building a patio, pay rent for the patio, buy some new furniture, buy heaters, buy plants, buy everything to make the place look good.”
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In addition to outdoor dining, millions of homebound Americans are also grilling more or heating their patio and homes. There’s also more exports to China, resulting in higher prices all around.
It’s all on top of higher demand for heating homes in regions with lower temperatures, along with more exports to Asia.
The CEO of Suburban Propane said the industry will have enough supply to meet demand due to higher domestic production, but the pandemic has led to stretching in new ways.
“The wholesale price of propane is up about double where it was last year at this time and it’s been steadily rising,” Michael Stivala said. “People are in their house more so they’re not turning the heat down during the day like they used to. And then the impact of outdoor dining certainly has driven a different kind of demand that we don’t normally see at this time of the year.”
Market conditions have driven propane prices up by over 70% in the past few months. Despite that and more, bitter cold is in the forecast for much of the country. Stivala said he doesn’t expect prices to match what happened during the Polar Vortex of 2014.
“We’re in a much better position as a country from an inventory perspective, we’re producing a lot, and we’re keeping a lot of it here in the United States,” Stivala said.
It is cold comfort for those paying more, working harder, but still making less.
“We’re trying to do as much as possible to keep the guest comfortable and get business going. That’s the most important thing to take care of our guest and get more people coming out to the place,” Espinoza said.
