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 Trudeau promises $1B in loans for child-care providers to expand care centres
The federal government is launching a new loan program to help child-care providers in Canada expand their spaces, and will be extending further student loan forgiveness and training options for early childhood educators, Prime Minister Justin Trudeau announced Thursday.
Spring allergy season has begun. Where is it worse in Canada?
The spring allergy season has started early in many parts of Canada, with high levels of pollen in some cities already. Experts weigh in on which areas have it worse so far this season.
'Nonsense:' Doug Ford slams lawsuits filed by Ontario school boards against social media platforms
Premier Doug Ford says that lawsuits launched by four Ontario school boards against a trio of social media platforms are “nonsense” and risk becoming a distraction to the work that really matters.
Several flight attendants from Pakistan have gone missing after landing in Canada
Multiple flight attendants from Pakistan International Airlines have abandoned their jobs and are believed to have sought asylum in Canada in the past year and a half, a spokesperson for the government-owned airline says.
N.B. man wins $64 million from Lotto 6/49
A New Brunswicker will go to bed Thursday night much richer than he was Wednesday after collecting on a winning lottery ticket he let sit on his bedroom dresser for nearly a year.
Multiple bridges in Calgary shut down for police incident
Calgary police have shut down a number of bridges into and out of the downtown core as officers deal with a distraught individual.
King Charles calls for acts of friendship in first public remarks since Kate's cancer diagnosis
King Charles III gave public remarks for Maundy Thursday, addressing the importance of acts of friendship, following his and Catherine, Princess of Wales’ cancer diagnoses.
Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison
Crypto entrepreneur Sam Bankman-Fried was sentenced Thursday to 25 years in prison for a massive fraud that unravelled with the collapse of FTX, once one of the world's most popular platforms for exchanging digital currency.
A dog and a bird formed an unlikely friendship. Their separation has infuriated followers
Peggy is a stout and muscular Staffordshire bull terrier, and Molly is a magpie, an Australian bird best known for swooping on humans during breeding season, not for befriending dogs. But in an emotional video posted online, Peggy’s owners announced that the animals had been separated.