Propane expected to soar The price could be 50 percent higher this winter than it was a year ago. By WILLIAM RYBERG Register Business Writer 08/23/2000

-------------------------------------------------------------------------------- Iowans can expect to pay more to heat their homes with propane and heating oil this winter.

Rural residents with fixed incomes will be among the hardest hit.

Darrell Messersmith of rural Brooklyn said he and his wife, Donna, both with medical problems, will set the thermostat low and cut other expenses to pay their heating costs.

"I just don't know how we'd do it, really," Messersmith said.

The average price for propane in Iowa this month was 84 cents a gallon, up 44 percent from a year ago, an Iowa Department of Natural Resources survey showed.

The average heating oil price was $1.06 a gallon, up 38 percent from a year ago.

Prices can be expected to rise higher this fall and winter, said David Downing, a fuel price expert for the department.

A cold winter and low propane inventories could push the price to more than $1 a gallon, Downing said. Prices are expected to be at least 50 percent higher this winter, he said. They could even double.

An estimated 149,000 Iowa households use propane. Heating oil is used in about 53,000. Iowa has about 1.1 million households.

Experts blame the price increases on high crude oil prices, low inventories of propane and heating oil, and growing worldwide demand for petroleum products.

Iowans were warned last month that natural gas heating bills this winter could be 50 percent higher than a year ago.

Jerry McKim, bureau chief of Iowa's Bureau of Energy Assistance, said higher heating prices would mean the state needs $6 million to $9 million more to provide low-income Iowans with bill assistance. The fuel assistance program received about $19.9 million last year in federal funding.

The natural resources department advises propane and heating oil users to lock in their winter heating fuel costs with retailers and to keep their tanks full.

Deb Grooms, executive director of the Iowa Propane Gas Association, said it takes about 1,250 gallons of propane to heat the average American home during the winter. At 70 cents a gallon, the January price, that amounts to $875. A 50 percent price increase would push the total to $1,312.50, an increase of nearly $440.

An estimated 800 gallons of heating oil is needed to heat a home.

With a 50 percent increase from last January's price - 93 cents - this winter's heating oil bill would climb to $1,116, a $372 increase.

Those with electric heat can breathe a little easier. Rates will remain unchanged from last year, MidAmerican Energy Co. said.

http://www.dmregister.com/news/stories/c4789010/12157908.html

-- Martin Thompson (mthom1927@aol.com), August 23, 2000