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Canada to investigate propane shortage, price spike

The federal government says it plans to investigate skyrocketing propane prices and supply shortages, Natural Resources Minister Joe Oliver told the House of Commons.


The federal government says it plans to investigate skyrocketing propane prices and supply shortages, Natural Resources Minister Joe Oliver told the House of Commons.

Customers without fixed price contracts are currently paying as much as $1.10 per litre for propane in some parts of Ontario and Quebec, up from the 70 cents-per-litre range during October 2013.

“We will be asking the National Energy Board and the Competition Bureau to review propane market issues, including high prices and scarcity,” Oliver told the House of Commons on January 30, 2014.

Ontario’s Energy Minister Bob Chiarelli told reporters that he welcomes the propane investigation.

In January 2014, the Canadian Propane Association (CPA) blamed transportation issues for propane shortages in some parts of central Canada, while temperatures remained unusually cold and inventories continued to be depleted at higher than normal rates.

According to the CPA, propane inventories were already 25 per cent lower in December 2013 than they were in the same month in 2012. The speculation is that a high demand from farmers depleted inventories when wet weather and a late harvest in the U.S. midwest caused increased demand for propane to dry crops before storage.

The National Energy Board stated in its 2014 winter outlook that a 22 per cent increase in exports of propane to the U.S. during winter 2012-2013 had reduced Canadian inventories to “very low levels” by spring 2013.

There has been no indication of a timeframe for the propane review.


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