Canmore, Alta. – Although much attention has been paid to rising gasoline and natural gas prices, Canada’s propane prices are also skyrocketing – analysts say will have a major impact on rural Canadians this winter.

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Propane, produced as a by-product of natural gas, has seen dramatic price increases over the past three months, with prices in Edmonton, for example, at US$1.40 per gallon roughly US$0.25 per gallon, according to ATB Capital Markets. growing from. .

This seven-year high drew a stern warning from research firm IHS Markit, who warned that US propane prices are so high and supplies so short that the market is headed for “Armageddon” this winter, According to Bloomberg.

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“The prices are really high at the moment, because the inventory is very, very low,” commodity analyst Rory Johnson told Granthshala.ca over the phone on Thursday.

“Due to the decline in oil and natural gas production due to Covid and energy prices globally, we are exporting a lot of this fuel, propane and natural gas. Plus we’re not producing as much domestically in North America.”

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Johnson says a large part of the increase is due to overseas demand, where prices are even higher than in North America.

“The inventory of propane is even lower than that of natural gas. And even less, because exports have increased even more dramatically in propane, then they have natural gas,” he explained.

“Propane exports now account for something like 60 percent of the total U.S. market for propane, or it’s still only 15 percent for natural gas.”

Extreme weather has also played a role in energy prices in North America. Gas prices initially rose in late September thanks to Hurricane Ida, which shut down a good portion of US oil and natural gas production in late August.

And with cold winters expected here at home and abroad, it doesn’t look like prices will come down anytime soon.

“Honestly, we’ll know when the weather forecast is better,” Johnson said. “It doesn’t look like the crisis or rolling crisis we’re seeing in Europe and Asia is going to end any time soon, unless there’s a very mild winter … more time for production to ramp up again. .

With energy prices continuing to rise, consumers across Canada could face higher heating costs this winter. While natural gas is the primary energy source for more than half of Canadian households, approximately 1.4 million households rely on other fuels, including hot oil or propane, to heat their homes, especially in rural areas.

“Propane is a staple for rural and off grid communities,” Johnson said. “Filling those propane tanks this winter is going to be a lot more expensive — and it’s not even cold yet.”