We’ve got your back on lower prices!

We have both Market Price and Price Protection Programs!

 Prices and orders for the 2018-2019 Winter will be available no later than July 1.

Price Protection Pricing:

Beginning no later than July 1, 2018, we are offering three price protection programs for winter 2018-2019:

  • Pre-Buy Fixed Price

    • What you pay now: You pay the Pre-Buy Fixed Price applicable to your delivery area, plus sales tax at the time you place your Pre-Buy Fixed Price order on our website.

    • Minimum purchase and delivery: Requires a minimum purchase and delivery of 500 gallons.

    • Delivery price and period: Deliveries will be made at the Pre-Buy Fixed Price applicable to your delivery area between September 1, 2018 and April 30, 2019. At our discretion, we may make deliveries before September 1, 2018 and after payment.

    • Delivery option: Requires the Keep Full delivery option.

    • No Discount: Not eligible for the early payment discount.

    • Payment is non-refundable: Any unused portion of your Pre-Buy Pricing gallons will be credited to your account to be applied to future propane purchases from us at our then current prices and terms.

    •  Click here to place your order.

  • Pre-Buy Capped Price:

    • What you pay now: You pay the Pre-Buy Capped Price applicable to your delivery area, plus sales tax, at the time you place your Pre-Buy Capped Price order on our website.

    • Minimum purchase and delivery: Requires a minimum purchase and delivery of 500 gallons.

    • Delivery price and period: Deliveries will be made  at the lower of our Current Price plus $0.10/gallon or the Pre-Buy Capped Price applicable to your delivery area between September 1, 2018 and April 30, 2019. At our discretion, we may make deliveries before September 1, 2018 after payment.

    • Delivery option: Requires the Keep Full delivery options.

    • No discount: Not eligible for the early payment discount.

    • Payment is non-refundable: Any unused portion of your Pre-Buy Pricing gallons will be credited to your account to be applied to future propane purchases from us at our then current prices and terms.

    • Click here to place your order.

  • Price-Cap Protection:

    • What you pay now: You pay a Price-Cap fee of $50 for the first 500 gallons plus $0.06/gallon for each additional gallon in addition to the 500 gallons that you would like to include in the Price-Cap Program.  This fee is waived for our leased tank customers.  The Price-Cap fee must be paid at the time you place your Price-Cap order on our website.

    • Minimum purchase and delivery: Requires a minimum commitment for purchase and delivery of of 500 gallons.

    • Delivery price and period: Deliveries will be made at the lower of our Current Price or the Price-Cap Price applicable to your delivery area between September 1, 2018 and April 30, 2019.

    • Delivery options:  We strongly recommend taking delivery on the Keep-Full option, but can accommodate the Call-In Option subject to the limitations set forth in our Standard Terms and Conditions.  There is a a minimum delivery of 250 gallons. The Price-Cap price is subject to upward adjustment if you take delivery of less than 250 gallons. In addition, you may be subject to additional fees if we are unable to accommodate your delivery date or if you run out of propane.

    • Price-Cap can be cancelled for late payment: Payment for all Price-Cap deliveries must be made within 30 calendar days of delivery. Failure to pay for Price-Cap gallons within the allowable time may result in a termination of Price-Cap Pricing and all future deliveries will be made at Current Pricing rates. In addition, any Price-Cap Pricing delivery not paid within 30 days will be subject to additional charges and additional action as outlined in our Standard Terms and Conditions.

    • Early discount payment available: Price-Cap deliveries are eligible for the early payment discount.

    • Price-Cap fee is non-refundable:  This is a service fee for arranging hedge contracts with traders, wholesalers or other third parties.  We must pay it to them regardless of whether you honor the terms of our agreement.

    • Click here to place your order.

Market Pricing:

We refer to our market price as our “Current Price.”  Our Current Price is available on our website and is subject to change at any time.  Our Current Price has consistently been lower than the average market price charged by Michigan retailers. Click here to check the Current Price.

Our Current Price requires a minimum delivery of 250 gallons and is subject to upward adjustment if you order your propane from us under the Will-Call Delivery Option. 

Market pricing can be effective as long as propane prices are not volatile and propane supplies are not limited.  As recently as four years ago, during January 2014, prices exceeded $4.00/gallon.  With the notable exception of the most recent 2017-2018 Winter, with plentiful supplies and low wholesale prices, customers who have used Current Prices has enjoyed relatively low prices.

Customers who cannot afford a spike in propane prices should strongly consider one of our Price Protection pricing options described above.

FAQs

Q: Why purchase price protection?

A: Price protection protects you from propane price spikes that may occur.  Propane prices have been relatively low and stable since 2014.  However, prices in 2014 exceeded $4/gallon when severe shortages occurred.  The price of other commodities, especially oil, can impact propane prices, as well as economic conditions outside the U.S., which can have a significant impact on propane exports from the U.S.  These and many other factors can cause propane prices to increase.

Q: What’s the difference between “Pre-Buy Fixed-Price” and “Pre-Buy Capped Price”?

A: Pre-Buy Fixed-Price is exactly what the name suggests.  All of our deliveries to you will be made at the Pre-Buy Fixed Price regardless of delivery date.  In contrast, the Pre-Buy Capped Price also is as the name suggests.  If our Current Price plus $0.10/gallon at the time of delivery is lower than the Pre-Buy Capped Price at the time of delivery, you will be charged only that lower price.

Q: Which Pre-Buy Price Protection Program should I pick?

A: It depends on your view market trends moving forward and when prices may change.  To “win” under the Pre-Buy Fixed-Price Program, you are betting that prices will rise to the point that you pay less then you would under the Pre-Buy Capped Price Program.  That program charges a higher price cap and a $0.10/gallon price premium over the prevailing market price.  We established this price level to make sure that we do not lose money on your decision and that you may save money based on your decision.  It’s your gamble.  Keep in mind that our belief that that prices will go up and may even spike.  What we do not know is whether it will be soon enough or significant enough to make the Pre-Buy Fixed-Price option the best choice compared to the Pre-Buy Capped Price Option.  For example, if prices continue at their current price well into the fall and early part of winter, it is possible that the Pre-Buy Capped Price program will save you money because the savings at our Current Price plus $0.10/gallon exceed the charges for deliveries at the Pre-Buy Capped Price.  The decision is up to you, your financial experts, or your tarot card reader. We have deliberately set out prices to avoid taking our own financial decision and leave it to you to decide.  As we mentioned in previous blogs in the past few weeks, our view is that prices will increase significantly.  We also noted that if we truly were good at making these bets, we would be flying on private jets with Warren Buffet and not writing Caywood Propane blogs. Your call.

Q: Why would I choose a Price-Cap Program instead of the Pre-Buy Fixed-Price or Pre-Buy Capped Price Programs?

A: There are many reasons.  The first one is you cash flow position.  The Pre-Buy options require payment for the entire winter period, up front.  Some of us simply do not have that cash.  The Price Cap Price option is an alternative because it requires a smaller up-front cash commitment.  It does have a higher capped price, so you may wind up paying more under the Price-Cap Price option than you would under the Pre-Buy options, but you still may wind up saving money, especially if prices spike in a manner like they did in 2014.  In our view, the Price-Cap Fee that you pay for Price-Cap Price cap protection is like an insurance policy.  The premium in this case is the $50 for the first 500 gallons plus $0.06/gallon for any gallons in excess of 500 gallons for which you might like “coverage.”  If prices remain below the Price-Cap Price applicable for your area, then the Price-Cap Fee you paid was for “coverage” on a claim never made because there were no “damages”: the Current Price never exceeded the Price-Cap Price.  On the other hand, if prices go above the Price-Cap Price at the time of delivery, you are given an “insurance” coverage payment in the form of a Price-Cap Price lower than the Current Price.  We use this analogy for purposes of simplification only. We absolutely are not an insurance company nor are we regulated as such.

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