Propane Cost and Requirements

Answer 1

The propane prices is one of complex question to answer because propane is a commodity that is refined from other commodities and is traded on a worldwide market, propane prices can fluctuate randomly as it is depending on unforeseen economic, political, climatic. Just remember that propane prices are much more complex than anybody feels and while propane companies are for profit businesses, they are not always profitable. One of the main reasons influencing the price of propane is the higher demand. Most of the users don't understand the requirements implemented on propane companies by local, state, and federal government. Few requirements are:  to give hazardous materials reporting and compliance training to the staff, organization licensing fees administered by state propane regulatory agencies, employee experienced, Department of Homeland Security need security and emergency plans submitted regularly.

One of the huge expenses a propane company has is its insurance. For getting insurance, a propane dealer must give prove of compliance for the above in addition to many other requirements implement by the underwriter. Without insurance, a propane company will lose its license and cancel operation for the future. And just like any other business, propane dealers have huge maintenance, management expenses, payroll, taxes, fuel costs, and various other operational costs so contrary to famous belief, the market price for propane subtracted from the dealer price is not purely profit. That's just what's left over for the dealer to operate the business with. The profit, if any during the previous years, is what's left over after operational expenses are paid.