Michigan uses more propane by volume for residential purposes than any other state. Propane is about six cents a gallon higher this year than last, averaging about $1.66 per gallon. The question this year is whether the price will rise further.
Weather is the biggest factor in the demand for propane and it’s expected to be a normal Michigan winter.
There are a couple of other factors tougher to predict than the weather. The first is whether more propane will be used because of the COVID-19 pandemic.
“We are likely to see an increase in demand in the residential sector due to more workers staying at home and more students at home. So, residents are likely to turn up their thermostat a little bit more than they would in past years,” said Alex Morese, manager of the Energy Security Section at the Michigan Public Service Commission.
The other factor is also caused by the pandemic.
There are reports that many restaurants are buying propane heaters for outside dining.
“And I imagine it will increase the commercial purchase of propane to fuel those heaters. But I’m not sure what impact that will have on the overall state demand,” Morese said.
The inventories of propane in the Midwest are down slightly from last year and from the five year average, but Morese believes that won’t be a major factor for Michigan propane consumers.