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
Senate expenses climbed to $7.2 million in 2023, up nearly 30%
Senators in Canada claimed $7.2 million in expenses in 2023, a nearly 30 per cent increase over the previous year.
Pedestrian, baby injured after stroller struck and dragged by vehicle in Squamish, B.C.
Police say a baby and a pedestrian suffered non-life-threatening injuries after a vehicle struck a baby stroller and dragged it for two blocks before stopping in Squamish, B.C.
Tom Mulcair: Park littered with trash after 'pilot project' is perfect symbol of Trudeau governance
Former NDP leader Tom Mulcair says that what's happening now in a trash-littered federal park in Quebec is a perfect metaphor for how the Trudeau government runs things.
'It's discriminatory': Individuals refused entry to Ontario legislature for wearing keffiyeh
Individuals being barred from entering Ontario’s legislature while wearing a keffiyeh say the garment is part of their cultural identity— and the only ones making it political are the politicians banning it.
RCMP uncovers alleged plot by 2 Montreal men to illegally sell drones, equipment to Libya
The RCMP says it has uncovered a plot by two men in Montreal to sell Chinese drones and military equipment to Libya illegally.
Government agrees to US$138.7M settlement over FBI's botching of Larry Nassar assault allegations
The U.S. Justice Department announced a US$138.7 million settlement Tuesday with more than 100 people who accused the FBI of grossly mishandling allegations of sexual assault against Larry Nassar in 2015 and 2016, a critical time gap that allowed the sports doctor to continue to prey on victims before his arrest.
Canucks goalie Thatcher Demko won't play in Game 2
The Vancouver Canucks will be without all-star goalie Thatcher Demko when they face the Nashville Predators in Game 2 of their first-round playoff series.
Man wanted in connection with deadly shooting in Toronto tops list of most wanted fugitives in Canada
A 35-year-old man wanted in connection with the murder of Toronto resident 29-year-old Sharmar Powell-Flowers nine months ago has topped the list of the BOLO program’s 25 most wanted fugitives across Canada, police announced Tuesday.
Doctors ask Liberal government to reconsider capital gains tax change
The Canadian Medical Association is asking the federal government to reconsider its proposed changes to capital gains taxation, arguing it will affect doctors' retirement savings.