The demand-supply laws of economics apply to propane because like many other commodities, propane is getting expensive due to the rising prices of crude oil which is the raw material for its production. Furthermore, with the increasing global population and increased usage of cleaner-burning fuels today, the demand for propane is higher than in the past. Since it is a light hydrocarbon, it can easily be burnt with a lower amount of heat required for ignition unlike the heavier petroleum commodities like furnace oil. Increased demand for plastic as a lighter material and its lower cost compared to metals causes higher demand for propane globally. Propane has also replaced many fuels like natural gas and gasoline in automobiles. For refrigeration applications, propane proves to be a great industrial refrigerant, further adding to its usefulness in the industrial sector. Once again, these factors are offsetting the balance of demand and supply of propane globally. Therefore, all these factors serve to enhance the prices of propane which is now much more costly than before.
The reasons why propane is so expensive
Propane is a lighter hydrocarbon than naphtha which is the precursor of gasoline. Since gasoline is easier to burn due to its readiness to vaporize under atmospheric conditions, propane is easier to burn than even gasoline since it is lighter than gasoline. Therefore, in automobiles where a high voltage spark plug is used to ignite gasoline at high pressure, the only sight of flame can ignite propane under atmospheric conditions. Therefore, in areas where natural gas is unavailable, propane can easily replace natural gas.
The high cost of metals and the lack of alternatives to them are causing them to be replaced by plastics in many areas of industry. The substitution is being offset by the growth in polypropylene use. The high cost of metals is also causing them to be replaced by plastics in many areas of industry, but this substitution is being offset by the growth in polypropylene use.
LPG-based automobiles provide great utility because the cost per kg of LPG is much lower than Compressed Natural Gas (CNG) or gasoline engines. Therefore, not only propane is invaluable for automotive part manufacturing, but also automobile fuel replacement as a cost-effective solution.
Sectorial price impacts
In countries where natural gas is not available for household consumption, propane is the best solution. Propane is a cheaper and more efficient alternative to natural gas when it comes to heating homes. The U.S. residential sector is the largest propane consumer, using it for cooking and heating water and space in the winter and autumn seasons. ..
The industrial sector dominates propane consumption in the United States. The high purity requirement for propane makes it a popular choice for many industries, including the manufacturing and refrigeration sectors. In these industries, the use of propane leads to higher overall consumption than any other sector. Often, the prices of industrial-grade propane are higher than the other sectors due to the higher purity requirement.
The commercial and transportation sectors are the lowest demanding sector for propane. Since commercial centers like shops and malls do not operate on a 24-hour basis, their consumption is lower than the other sectors. The transportation sector also does not consume a lot of propane as it is not the primary fuel incorporated in their design. ..
Conclusion
The demand for propane is constantly increasing due to its many applications in the industrial, commercial, and transportation sectors. The price of propane has been rising due to this increase in demand and the environmental concerns that come with it.
A1: Propane is not sold at ordinary fuel stations because it is a heavier fuel than gasoline and diesel. It is also more expensive to produce and transport. ..
Propane is not sold at any ordinary fuel station. It is only available at specially-made propane stations, which require high pressure to store it.
A2: Propane is not dangerous, but it is not a safe fuel to use.
Propane is easily capable of catching fire. Therefore, it should be sold away from sources of ignition or direct sunlight. Along with its high price, this can also incur significant costs that add to the overall operational cost of propane consumption. ..
