Rest easy folks. Some joker over on the NAT site has come up with the plan to solve the propane crisis. He has brilliantly concluded that based off of the spot price at a plant in Texas plus .50 a gallon to send a transport and retrieve it, he shouldn't have to pay anymore than $2.50 a gallon for propane from his local supplier. The idea seems simple enough but whenever there is a squeeze on a product be it real or manufactured, you are going to pay a lot more for it than what it looks like you should have to on paper. A little like basis on corn when things are tight.
He said that he would phone his supplier and tell him that he wanted filled up and would pay no more than $2.50 a gallon for the product. If they refused he would simply tell them to pound sand and take his business elsewhere. Sounds good right? Who knew it could be so easy?! Keep in mind this guy is sitting on a few thousand gallons of gas and will not need any until spring or summer. Pretty easy to sit back and play tough guy under those circumstances. Someone pointed out to him that almost all suppliers are refusing new business at this time. According to him he has been with his supplier so long and he is such a great customer they would never risk losing his business. One of the guys urged him to call his supplier the next morning and demand product for $2.50 a gallon and see what happened. For some reason he didn't want to do that. This is the same guy that has lower input and land costs than anyone else, next to no equipment expense, and on and on and on.
As far as this whole propane mess is concerned I imagine some of the supply crunch is very real and some of it is people taking advantage of other people. Personally I always try to contract the amount I used the year before ahead of time. Did that this year for $1.45 back in August but will be out of those gallons in a couple more weeks. I guess I will pay whatever I have to to stay warm! I'm not sure why a lot more people don't forward contract. In most cases you don't even have to pay it all up front. 25% down will allow you to lock in however many gallons you want. I think a lot of guys don't like to get locked into a prepay contract because they are just so sure their supplier is trying to screw them by locking in the price only to have it go down later. I feel for those who are on a very fixed income and have little or no opportunity to forward contract. I feel a lot less sorry for those who were too cheap to do it because they thought someone was trying to screw them. I hope everyone can get enough to stay warm without breaking the bank. Good luck everyone!
