Summer 2023 Trends in Commercial Propane Gas Supply
While the commercial gas industry continues to navigate ongoing supply chain challenges, suppliers must consider the state of propane as it rises in popularity. You may ask: How are supply chain challenges and trends affecting propane gas, and how will propane fare for the duration of 2023?
Businesses and suppliers seek these answers to determine if propane is the right commercial gas choice to optimize business operations. By exploring propane industry trends and evaluating its outlook for 2023 and beyond, you can better understand the advantages of investing in propane gas and how it can impact your company’s bottom line.
The State of Propane Around the World
Propane remains one of the most available resources both nationally and globally, with the global volume of propane hitting 164.3 million tons in 2021. The U.S. remains the top exporter, producing around 90% of propane’s domestic supply.
Looking at historical propane trends, the market underwent low inventories in 2020 and 2021 during peak pandemic years with low travel rates. 2022 brought new challenges from overseas with the Russian and Ukrainian conflict, which increased energy and domestic prices as producers sought to maintain and regulate propane gas supply. However, demand increased as travel resumed, and Russia enacted oil embargoes in 2022.
Already in 2023, the Weekly Petroleum Status Report reported in February that the rate of U.S. propane gas exports reached a record high at 1.845 million barrels per day (bpd). Compared to 2022, these export rates are 448,000 bpd higher, while domestic demand for propane was reported as even lower at 658,000 bpd. Experts predict these trends will continue unless overseas prices decrease, emphasizing the importance for propane suppliers to pay attention to the global propane gas market.
Exploring Current Propane Trends
Suppliers have realized that propane has defining characteristics and trends that separate it from common fuels like diesel and gasoline. As customers continue to adopt more sustainable solutions for their business operations, propane presents itself as a viable option. Listed in the 1990 Clean Air Act, propane is a clean, high-quality fuel source that provides sustainable energy and reduces greenhouse gas emissions. Businesses that use propane reduce the volume of air pollutants such as carbon monoxide and nitrogen oxide, making it both an ethical and economical choice.
The use of propane gas is seasonal, with peak months taking place from October through March. During these colder months, propane is used for heating across many industries. Supply issues are practically non-existent during propane’s off-season due to less demand. However, since the pandemic, equipment issues have started to affect operations due to backlogs and delays in obtaining propane cylinders. In this current climate, it is important to consider working with propane suppliers who have access to the necessary equipment to limit delays.
Forecasting Propane Trends in the Remainder of 2023
Keeping in line with seasonal trends, experts are already looking ahead to the 2023-2024 winter season and encouraging suppliers to prepare enough propane gas inventory to last during the winter months. This past winter, the team at EspriGas saw a higher inventory amount than the past two years, so it is best practice to pay attention to exports and their effect on inventories.
Moreover, U.S. states already have or are currently moving toward more regulated carbon emissions legislation, leading to an increased interest in propane gas. Due to propane’s expected growth, availability, and sustainability, we anticipate that commercial gas suppliers will prioritize propane gas over gasoline or diesel for the remainder of 2023.
Looking further down the pike, experts are already predicting the propane market will increase by 4.1% and reach 212.8 million tons by 2027. Both U.S. and overseas markets are expected to increase their propane consumption to meet future commercial, residential, and transportation needs.
How EspriGas Can Help with Your Propane Gas Needs
At EspriGas, we recognize that many of our current customers continue to navigate supply chain disruptions. In contrast, potential customers seek reliable commercial gas partners to avoid service issues with existing suppliers. When determining whether propane is a suitable industrial gas for your operations, consider consulting with a commercial gas partner that can connect you to thousands of suppliers and reduce your points of contact and invoices to one.
Our experts provide services to current customers to accommodate their propane needs, from recommending appropriate supply amounts to delivering propane to the right locations. Moreover, as we see a growing interest in propane, we continue to add regional suppliers to our portfolio to increase our U.S. footprint.
To learn more about the EspriGas commercial propane offerings for your business and identify any areas that can save you time and money, contact our experts.
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