Propane is produced from crude oil and oil refinery of natural gas. Most of the cost comes from refining the crude oil. But, most of the increase or decrease is based on supply and demand. If it is a colder then normal winter, the prices will rise. If it turns out being a warmer winter then normal, then price lowers. You can find more info on this topic at: EnergyInformationAdministrator or www.energyexplained.com
What Drives the price for Propane?
I was thinking about Propane and was wondering exactly where it comes from, what it is made of and why is it the price it is currently. I started looking into what influences the price of Propane? It started out that products that are common such as petroleum and others that are unique to Propane. The one important thing to keep in mind is that the Propane gas is easy and for the most part, safe to transport. It serves many different types of equipment, barbecues all the way to producing "Petrochemicals." The cost of Propane in these different consumer categories is influenced by prices of other types of fuels in this market. We also need to remember that where ever this refinery is located and the distance and the quantity ordered plays into the price fluctuation as well.