Six years ago when we built our home, propane rates from Suburban were around $1.50/gal. But that was six years ago and everyone knows what has happened to the petroleum market since then. I wasn’t surprised when the rate increased over the years. However, for my last several re-fills (averaging 300-400 gals or a total of over 1000 gallons in the last year), my propane provider (Suburban Propane) has charged me over $5.00/gal.
I contacted Suburban to see if there had been a mistake. And with each of my last two deliveries, I was given an adjustment of about $.60/gal, and was warned that these were one-time adjustments and my next fill would revert to my normal rate.
I became somewhat curious and suspicious of why the price has continued to climb even when market prices seem to have receded. I took a look at my rates over the past 6 years and I noticed that the rate has NEVER gone down; it has continued to increase even when market price trends down, my rate has steadily increased to today’s price of $5.01.
I began contacting several other providers and competitors of Suburban Propane... and I was quite amazed and aghast to find out that the 'going rate', at this time, from five other providers ranged from $1.70 to $2.30 per gallon, far less than half of what Suburban is charging myself AND my neighbors. FAR LESS. My contacts included Amerigas, Bowman, Hubbard, Patriot, FerrellGas. I can provide contact names and information received from each of these providers.
After contacting Chantell Hendrix, the local manager at Suburban Propane, and there was little progress to solve this pricing issue. Ms. Hendrix explained and tried to justify the rate in part by value added services; such as emergency service, payment options, and prepaid pricing. I did have occasion to use the emergency service about two years ago. It was far from acceptable. After three phone calls and a week’s time, we finally got our propane. The driver apologized profusely, but said that they just didn’t have enough staff to meet calls (at that time). As for the Prepaid Pricing service, my neighbor prepaid one year at a price of $4.25.
Regardless, the services mentioned are fairly standard among the five other providers I contacted, so I really don’t consider them a value added especially to the extent of Suburban’s pricing.
I told Ms. Hendrix of my findings from other propane providers, she cautioned that the prices I was given were probably for a 'first fill’ and I would be charged a different price for subsequent fills. But I have found that is just not the case. Indeed, one of the 5 providers does in fact offer a 'first' fill at $.30/gal less (from $2.17) to attract new customers. This is still a far cry from $5.01.
Each provider did explain that market price influences rates and rates will change between deliveries. But historical pricing over the last 2 years for EACH of the five providers, none have been even close to $5.00 rate that Suburban is charging. In fact the market price is currently going down and they are passing on those lower rates to their customers.
Historical pricing given to me was based on a residential 500 gallon tank, with usage between 900-1200 gals a year. Some of the prices reached a peak last year to that of $3-$4/gal, but ALL companies report that pricing has gone down from those levels to something closer to $1.70-$2.30/gal.
SO... WHY NOT JUST CHANGE PROVIDERS?
Unfortunately, to add insult to injury, Suburban Propane has refused to sell me the underground tank which I lease from them. Apparently it is company policy not to sell tanks… though no explanation was given as to the reasoning for that policy.
Instead I will be required to dig up the tank, obviously ruining 6 years of landscaping and causing additional expense of the dig (which is MY responsibility according to them) not to mention the installation of a new tank and the hardship to myself and my family. I have offered to pay a price for the tank at today’s retail price (even though it’s been in the ground for 6 years). My research indicates the price for a new 500 gallon tanks to be $1700 to $1800 (quoted from several of the other providers I contacted).
I have pleaded with Suburban to help me avoid the destruction of my landscaping, but to no avail. This is extremely unfortunate and seems even ‘spiteful’. But it appears that it is the only way I will be able to release myself from under Suburan’s hold.
A counter offer from Ms. Hendrix was another one-time rate at $4.50/gal… and then it was further reduced to $2.80/gal. But this price is still 21% higher than the highest price from another provider and it is a ONE-TIME price.
I have several neighbors that are also paying these exorbitant prices to Suburban... and I am gradually trying to notify them of this situation. But I wonder how many people are paying these prices without knowledge that they are being severely overcharged. I feel Suburban is gouging their customers; they are certainly not providing a 'fair and equitable' price for home heating propane.