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
BREAKING Former Air Canada employees among suspects identified in gold heist at Pearson airport: police
Police say one former and one current employee of Air Canada are among the nine suspects that are facing charges in connection with the gold heist at Pearson International Airport last year.
'$6.66 per day': Advocacy groups disheartened by funding in budget for disability benefit
Advocacy groups across Canada are expressing widespread disappointment about the amount of funding earmarked in the 2024 federal budget for the long-awaited Canada Disability Benefit.
BREAKING Toronto Raptors player Jontay Porter banned from NBA
Toronto Raptors player Jontay Porter has been handed a lifetime ban from The National Basketball Association (NBA) following an investigation which found he disclosed confidential information to sports bettors, the league says.
Earthquake jolts southern Japan
An earthquake with a preliminary magnitude of 6.4 hit southern Japan late on Wednesday, said the Japan Meteorological Agency, without issuing a tsunami warning.
MPs summon ArriveCan contractor to the House to be admonished in rare parliamentary display
Enacting an extraordinarily rarely used parliamentary power, MPs have summoned an ArriveCan contractor to appear before the House of Commons on Wednesday afternoon to be admonished publicly for failing to answer their questions.
opinion Don Martin: Gusher of Liberal spending won't put out the fire in this dumpster
A Hail Mary rehash of the greatest hits from the Trudeau government’s three-week travelling pony-show, the 2024 federal budget takes aim at reversing the party’s popularity plunge in the under-40 set, writes political columnist Don Martin. But will it work before the next election?
Gas prices across Ontario expected to climb to levels not seen since 2022, analyst says
Ontario is going to see a big jump at the pumps later this week as gas prices in the province hit levels not seen in nearly two years, according to one industry analyst.
Ancient skeletons unearthed in France reveal Mafia-style killings
More than 5,500 years ago, two women were tied up and probably buried alive in a ritual sacrifice, using a form of torture associated today with the Italian Mafia, according to an analysis of skeletons discovered at an archeological site in southwest France.
Paul McCartney and John Lennon’s sons have released a single together
A new Lennon and McCartney collaboration is the last thing anybody expected.