We live out in horse country and use propane with a 500 gal tank.
My question is on economics. The way it has been set up, the gas supplier owns the tank and the propane inside. They read a cubic feet meter and charge me.
Now they're raising prices and putting on surcharges, I called the guy, and he told me it would be cheaper all around if I bought what's in the tank and a regulator (tot about $450 - $500), they continue owning the tank, and then he just charges me market prices (currently $1.89 /gal) for refills.
I'm new to all this, and would appreciate any insights into the best way(s) to go on this. Continue as I am paying well over market, or own the gas myself, or what?
Sounds to me like he wants to make it simple. He owns the tank, and sells you the gas. Not sure why he wants to sell you a regulator, as there should be one on there if you're already using it. So long as you buy from him, and the rate is competitive with what you can get in your area, no sense going out and buying your own tank.
If you CAN find gas substantially cheaper, and a new/used tank isn't too much, that is the way to go. You just have to figure out how long it will take to pay off the tank. And then, who's to say that the new guy's low price won't bump up drastically on the next fill up? At least if you own the tank, you just buy from the cheapest place that will deliver.
I paid $2.79 per gallon the other day for ten gallons to fill up a couple of barbecue tanks. $1.89 sounds reasonable to me, but I DON'T LIVE WHERE YOU DO. Get the prices in your market, crunch the numbers, and go from there.
The deal he has offered you sounds okay to me. But I would see about buying the tank, that way he can't hold you hostage if you find someone who will fill it for less. Or next fill, he wants to jack the price. With him owning the tank, he has the leverage. And maybe that's what he wants to do. As long as it is HIS tank, you gotta pay what HE wants. But then, he might be a good guy and just wants to get away from meter reading and book keeping.
If it was me, I'd own the tank, and shop around when I needed it filled.
Before deciding, check to make sure other propane suppliers in your area will deliver to a tank they do not own. I recently moved from an area where no one would deliver to any but their own tanks -- rationale was that they couldn't be certain whether the tank was properly maintained. Don't know if it was a real issue, but do know you had to let whichever propane company you dealt with set their own tank. It wasn't too unusual to see tanks being moved in and out as people switched companies in pursuit of a better price on propane.
I live out in the country, have a 500 gal propane tank also. The company owns the tank, I pay to have it refilled and it's about $1.89 gal here in California. I am getting an Agraculture rate which makes it cheaper. Plus they fill all my bbq bottles if I leave them empty by the big tank..
The new regulator is proabably needed to replace the one that would have been built into the demand meter. Now that metering will be done on the truck rather than at the tank, you need something to replace that component. Not sure how much of that total was for gas vs. the regulator but I don't think they cost all that much, your tank must be nearly half full.
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