Cold snap draining fuel supplies, prices spiking - CBS 3 Springfield - WSHM

Cold snap draining fuel supplies, prices spiking

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HARTFORD, CT (WFSB/AP) -

A second fierce blast of winter weather is sapping fuel supplies in many regions and sending prices for propane and natural gas to record highs.

Homeowners said they've seen increases of 25 cents per gallon since Wednesday alone.

"There's nothing you can do about it," said Pat Downes, who uses propane. "You have to have heat. You have to put gas in your car, you have to buy groceries. Everything goes up."

Higher natural gas prices are also leading to sharply higher wholesale electricity prices, as power utilities snap up gas at almost any price to run power plants to meet higher-than-normal winter demand.

Propane companies said one reason is farmers in the Midwest. They're using large amounts of the fuel to dry out corn harvested after a wet season.

Propane users will get pinched the most. Those who find themselves suddenly needing to fill their tanks could be paying $100 to $200 more per fill-up than a month ago.

"The inventories are down this year about half of what they were last year," said John Malazzi of Quality Propane in Clinton.

In December, the dealer paid $1.70 per gallon. After taxes, fees and delivery to the customer, the average person paid about $2.40 per gallon. That climbed 22 cents in a month to $2.62, then another 40 cents two weeks later.

"It's not us that's reaping the benefits from the price increase," said Malazzi. "If anything it's hurting us."

Malazzi said his company has been trying not to pass the increases on to the consumer.

Homeowners who use natural gas and electricity will see higher heating bills because they'll use more fuel. But prices won't rise dramatically because utilities only buy a small portion of the fuel at the elevated prices.

"The temperature is down. I have a little electric heater so if it gets too cold, I turn that on for a little while just to warm it up," said Downes. "Put a sweater on, but that's life."

Copyright 2014 WFSB (Meredith Corporation). The Associated Press contributed to this report. All rights reserved.

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