Propane? Price per tank and gal/hr?

Discussion in 'Alternative Fuel Forum' started by djagusch, Oct 4, 2011.

  1. Jungle J

    Jungle J LawnSite Member
    Posts: 14

    Basically the propane companies will adjust the propane price depending on the volume used and contract period signed for. The assets they invest in the set up have to be paid for up in some fashion. It can be over a longer contract which would get you better price per gallon or shorter contract would get you higher price. Volume over that period of the contract will play in price as well. In your area we have been seeing the mowers run between 800 gal to 1600 gal depending on how long they run per year. The Cylinder exchange programs are calculated in the same fashion and they look at delivery routes and frequency as well as this plays in the cost to get the cylinders there. Hope this helps.
     
  2. Jungle J

    Jungle J LawnSite Member
    Posts: 14

    Thunderthud has a nice size mower fleet at 22 mowers and that should equate out to a much better price per gallon. Lock in around April for 12 month period at set estimated annual gallon contract and histrically this would get you the best pricing for the year. BUT not always, it's somewhat like playing the comodoties market.
     
  3. djagusch

    djagusch LawnSite Platinum Member
    from MN
    Posts: 4,202

    With the tank exchange program $2.25/gal. If I'm only doing mowers that is.

    With the fill station on site it will be around $1.86 to $1.90 /gal. I can make this happen with converting my truck because the volume I would do through the truck.

    If you are doing 100 gallons a week with the mowers I'm guessing you are mowing 40 weeks per year which would be 4000 gallons. Depending on the propane company that would be close to get a fill station provided for a low cost. Now if you transfer a truck I'm guessing you will for certain be in the range to get a fill station. It took me 4 propane companies to get right guy on the phone with the right programs. A account manager was his title up here.
     
  4. Jungle J

    Jungle J LawnSite Member
    Posts: 14

    Truck would definately help but dont forget if you live in warm climate during summer if your propane company knows what they are doing the dispsner would need the right pump if it has an OEM system Like Roush/ Ford. With the micron filtered system in them this increases pressure during filling to overcome which means a bigger pump than normal. This would increase the asset cost of the job for them and you. Make sure you let them know you plan on filling Automotive as the filler nozzle is different and they may want to add another micron filter on the filing system as well. This is not new in the world but for the US it is new to the propane industry here as of about 2 years ago. The technology has changed dramatically as well from the 70's if you get the right system. There are only a few of the National Companies that are on the forfront of this technology and just a few of the independants as this is an expensive invest for us on the propane end. Be very sure the company you deside to go with has a good understanding of what this is all about or has a national suppoert group for engine fuel. Other wise things may be good during cold months but in the heat of the summer you may experiance some issues new to them to over come.
     
  5. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,078

    Just doing some searchs for prices of propane and it looks like the wholesale price now is in the $1.47 range? Is that right for Texas area? So I am think that getting a lease tank of 500 gallon. What do you think a reasonable markup should be? I presently take my tanks to the mower dealer weekly and he fills for $2.79 so if he buys at $1.50 that is a good profit. I bought some of the tanks and he provided a couple.
     
  6. Jungle J

    Jungle J LawnSite Member
    Posts: 14

    ed2hess, curious. where did u get $1.47? Just checked and looks low by $.20
     
  7. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,078

    http://integrityenergy.com/tag/wholesale-propane-prices/

    I got to thinking about what kind of markup would be reasonable if it is delivered to a tank and $1 a gallon probably is about right. And in situations where the dealer is providing the 10 gallong tanks the same markup seem reasonable. It is apparent that you can't assume those tanks will last a lifetime. One of mine was rattling and the dealer just switch it out. Those tanks are almost $400 new. Since it is apparent that dealers probably buy a given amount over a fixed period that makes it risky for him.
     
  8. DR J

    DR J LawnSite Member
    Posts: 33

    Just to let all know, we sell propane. cost today was 1.95 wholesale for tank fill up, retail 3.09 unless your special. bottom line you get as much as you can get or what people will pay for it and come back, down the road uhaul sells it for 4.00 to 5.00 dollars. we try to to make 35%. with all the regs and licences we have to pay for and keep. Well thats in the state of texas, one of the only states that regulates propane, for safety and knowledge.
     
    Last edited: Oct 10, 2011

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