January 28, 2025

U.S. propane prices have traded higher so far this winter compared with last winter

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U.S. wholesale and retail propane prices have been higher so far this winter heating season (October–March) than during the same period a year ago, largely because of colder weather in January and higher exports, according to data from our State Heating Oil and Propane Program. Prices have been higher despite relatively strong propane inventories heading into this winter heating season.

U.S. wholesale propane prices
Wholesale propane spot prices at the U.S. benchmark at Mont Belvieu, Texas, have averaged $0.81 per gallon (gal) so far during the winter heating season (Oct 2024–Jan 2025), or $0.13/gal higher than year-ago prices. For the week ending January 20, 2025, U.S. wholesale propane prices were $0.97/gal, slightly higher than at this time last year when they were $0.79/gal.

Because the United States exports more propane than it consumes, exports can affect wholesale propane prices. More exports reduce domestic supply and generally mean higher U.S. wholesale prices. The United States is exporting record amounts of propane, averaging 1.8 million barrels per day in 2024, a 9% increase compared with 2023 and the highest weekly average on record.

U.S. retail propane prices
U.S. retail propane prices typically follow wholesale propane prices and supply and demand dynamics. Typically, propane prices rise during the winter, when demand for propane as a winter heating fuel grows and propane inventories are drawn down.

U.S. retail propane prices have averaged $2.51/gal so far this winter heating season, just $0.07/gal higher than during the same time last year. U.S. average retail propane prices have increased 5% from the beginning of this winter heating season to the week ending December 30, 2024.

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Retail propane prices for the four U.S. regions for which we publish data—the East Coast (PADD 1), Midwest (PADD 2), Gulf Coast (PADD 3), and Rocky Mountain (PADD 4)—are higher this winter compared with this time last winter. Similar to last winter's heating season, retail prices in all four regions stayed relatively flat until mid-January, when wholesale Mont Belvieu prices began to increase as temperatures dropped. In January 2024 and 2025, winter heating needs peaked, as measured by heating degree days, which indicate how cold the temperature was on a given day or during a period of days. December 2024 had more heating degree days than December 2023, and we expect more of them throughout this winter compared with last winter, according to our December Short-Term Energy Outlook.

Principal contributor: Josh Eiermann