Fuel Prices

With the cost of gasoline rising higher by the day, many people are looking for alternatives to gasoline and diesel to run their vehicles. Historically, propane has cost less per litre than both gasoline and diesel.

Although the prices for propane continue to rise along with other fuels, it still has significant price and tax advantages as a transportation fuel.

Propane prices are influenced by a number of factors:

• Crude oil and natural gas prices – since propane is produced from these sources, propane prices are heavily influenced by the price of oil and natural gas. 
• Supply and demand – as production goes up or down for oil and natural gas so does the amount of propane produced; prices will reflect these changes. Demand also varies. Traditionally, in the winter-heating months, demand increases, inventories decrease, and prices tend to be higher. In the summer months, demand decreases, inventories increase, and the pressure on price is reduced. 
• Weather – colder temperatures cause an increased demand for propane for heating purposes, often leading to an increase in the price.
• International influences – propane is increasingly being used around the world as an energy source. Inventory levels in the U.S. play a role in the competition for supply, thereby influencing the price. 
• Proximity to supply - locations farthest from the supply often pay more for fuel due to transportation costs.

Fuel Savings Success Story:
15 years ago Air Canada converted ground support equipment to propane. They’ve since reported 50% fuel cost savings ($300-350K per year). In 2005, Transport Canada announced a $107K subsidy to do the same in Calgary, where they expect annual reductions of 3,000 tonnes of carbon monoxide emissions and $1 million in fuel costs!

Annual Price Trend

From 1999 to 2009 across Canada, propane has on average cost 36% less per litre than gasoline, and 35% less per litre than diesel¹.

Monthly Price Trend

From January 2009 – December 2009, propane remained the most cost-effective option over both gasoline and diesel. During this period, the cost of propane in Canada averaged 59.9 cents per litre compared with 89.6 cents per litre for diesel and 94.5 cents per litre for gasoline.²

Weekly Pricing

Find this week’s propane pump prices for various Canadian cities: MJ Ervin Weekly Pump Price Survey

¹ Source MJ Ervin & Associates, Historical Fuel Prices, Average Monthly Retail Prices including Taxes, http://www.mjervin.com
² Source MJ Ervin & Associates, Historical Fuel Prices, Average Weekly Retail Prices including Taxes, http://www.mjervin.com

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