News of current energy shortages in Europe and China have been widely reported. Gasoline posted prices everywhere are up.

Like all other propane distributors, EDPRO purchases propane from the energy producers. Price at the production source is determined based on a global marketplace, with Canada being part of a North America wide distribution grid. Although both Canada and the US produce sufficient propane to meet all domestic demand, price is still set on a global basis.

Over the last 5 months North America has shipped an average of ~100 Very Large Gas Container (VLGC) ships of propane to China. These are mostly from the US Gulf Coast, but also some from the west coast of Canada. Normally when the North American price goes up, the export market declines. This year the appetite from China has not been curtailed, resulting in less propane destined for domestic inventory and the increased pricing currently being experienced.

Compounding the effect of high export demand has been a slow reaction to bring on more supply. There has been limited appetite for additional investment in the energy sector and the large shale gas regions in the US have been slow to ramp up production with additional wells.

As always, EDPRO has been prudent and has secured propane to meet all our expected customer demand, so our customers can be assured all their volume requirements will be met.

It is impossible to accurately predict how long this high energy pricing will last.

EDPRO recognizes the strain the current wholesale propane pricing is causing for many of our customers. We too look forward to the return to more ‘normal’ pricing once the current tight global supply scenario eases.