Propane price surges to impact northern rural residents, local industries
As prices of oil and gas rise during the pandemic, commodity experts are saying it's also affecting the price of propane.
It's impacts are being seen around the country, with a propane supplier in Timmins telling CTV that prices in the area have soared up to 200 per cent.
"Right now, it's over double what it was last year," said Propane Energy Solutions' Timmins regional manager Dominic Palermo.
Wholesale prices of propane this time last year were in the range of $0.20 per litre, Palermo said, and current prices are closer to $0.60 cents. The extra cost are then passed down to consumers.
This is leading to concerns over the impacts on residents in rural communities, as well as industries like construction, which rely on propane for heat during the winter months.
Higher rural northern heating costs
Timmins city councillor John Curley said he has constituents that power their homes with propane, who he worries will face challenges due to the price surge.
"It's going to be devastating for a lot of them," Curley said.
"Our prices up here, I find, already are high."
Costs of gas tend to be higher in northern Ontario than other parts of the province — and with propane being a byproduct of oil and natural gas, it typically follows the price fluctuations of those commodities.
Palermo said residential propane customers who locked in a one-year fixed rate contract earlier this year are being spared the full brunt of the price surges, but are still seeing a 20 to 30 per cent increase over last year.
He gave the example of a 1,200 square foot home, which would typically use up to 5000 litres of propane in a year, normally costing roughly $3000. That cost would jump closer to $4000 this year, under a fixed rate contract.
Those ineligible for a contract, however, are subjected to the price changes as they happen, potentially costing them hundreds of dollars more.
The worry for Curley is that those who cannot bear even a 30 per cent extra cost will have to make up for that by heating only certain rooms of their homes, using less heat or accessing food banks.
Pandemic supply shortage
The surges are due to a shortage of supply in Canada, said Palermo, in part a result of lower production during the pandemic.
Moreover, he said the country exporting much of its propane supply overseas is exacerbating the domestic shortage.
"They're getting a better bang for their buck by exporting it," Palermo said.
While municipalities have no power over this, Curley said he wants to see action from the federal and provincial governments.
"We have to find some sort of regulation to keep the prices fair," he said.
Larger impact on industries
But Palermo said the largest impact of the price surges will be on industries like construction, who have no options of protection against rising costs.
Many construction projects are not yet hooked up to natural gas, he said, and so must use propane to heat their sites and buy it at the current price.
Palermo foresees this causing a negative ripple-effect throughout the winter.
"Any time you're dealing with propane in the winter time, there's a huge effect when you have a shortage," Palermo said. "It affects many different markets."
CTVNews.ca Top Stories
There's actually no such thing as vegetables. Here's why you should eat them anyway
The rumours are true: Vegetables aren't real — that is, in botany, anyway. While the term fruit is recognized botanically as anything that contains a seed or seeds, vegetable is actually a broad umbrella term.
BREAKING Israeli forces seize Rafah border crossing in Gaza, putting ceasefire talks on knife's edge
Israeli tanks seized control of Gaza’s vital Rafah border crossing on Tuesday as Israel brushed off urgent warnings from close allies and moved into the southern city even as ceasefire negotiations with Hamas remained on a knife’s edge.
The Met Gala was in full bloom with Zendaya, Jennifer Lopez, Mindy Kaling among the standout stars
The Met Gala and its fashionista A-listers on Monday included Jennifer Lopez, Zendaya and a parade of others in a swirl of flora and fauna looks on a green-tinged carpet lined by live foliage.
'It looked so legit': Ontario man books $7,700 luxury villa on Booking.com, but the listing was fake
An Ontario man says he was charged more than $7,700 to book a luxury villa on a popular travel website -- but the listing was fake.
Noelia Voigt resigns as Miss USA, citing her mental health
Noelia Voigt, who was crowned Miss USA in November 2023, has announced she is resigning from her role, saying the decision is in the best interest of her mental health.
Putin begins his fifth term as president, more in control of Russia than ever
Vladimir Putin began his fifth term Tuesday as Russian leader at a glittering Kremlin inauguration, setting out on another six years in office after destroying his political opponents, launching a devastating war in Ukraine and concentrating all power in his hands.
Winnipeg man admits to killing four women, argues he's not criminally responsible
Defence lawyers of Jeremy Skibicki have admitted in court the accused killed four Indigenous women, but argues he is not criminally responsible for the deaths by way of mental disorder – this latest development has triggered a judge-alone trial rather than a jury trial.
Mediterranean staple may lower your risk of death from dementia, study finds
A daily spoonful of olive oil could lower your risk of dying from dementia, according to a new study by Harvard scientists.
An El Nino-less summer is coming. Here's what that could mean for Canada
As Canadians brace themselves for summer temperatures, forecasters say a weakening El Nino cycle doesn’t mean relief from the heat.