What propane dealers charge

Whenever you enter into a contract, it is advisable to check exactly what the contract entails. Often, contracts include penalties or added fees. Propane supply agreements are no exception. This is why it is recommended that you check what fees and charges apply for different propane dealers and see whether they might apply to your situation.

Item

Description

Comment/Price

HAZMAT

Offsets safety training and compliance costs.

Charged for each propane delivery. Most dealers charge a HAZMAT fee or a variant thereof.

Fuel surcharge

Offsets transportation costs linked to fuel price hikes.

Charged for each propane delivery. Most dealers charge this.

Delivery fee

Charged to deliver propane.

Charged for each propane delivery, if applicable. Most dealers do not charge delivery fees but they can reach $100.

Minimum delivery fee

Offsets costs associated to delivering limited amounts of propane or less propane than the contract forecasts.

If you are not sure of your propane usage, check what the minimum delivery fee for your propane agreement would be (it can reach $150/delivery).

Off-route delivery fee

Charged to customers who request a delivery beyond the dealer’s planned delivery route.

Ask what the local fee would be for your home. Can be as high as $150.

Special/Emergency delivery fee

Charged to customers who request a delivery after hours.

Several hundred dollars so enquire to know what you might have to pay if you ran out of propane.

Pump-Out fee

Charged to customers who need the tank drained to have it moved or removed.

Tanks are not allowed to be moved if the level is above 5% but some dealers buy excess propane from customers so check whether this is true of each company and at what rate.

Closeout fee

Offsets administrative costs of closing a customer’s account.

N/A.

Early termination fee

Charged when a customer stops their contract before the end of the agreed period.

Check what the dealer’s early termination conditions are.

Leak Test Fee

Charged when a propane tank is installed or when propane supply has been interrupted (e.g., if a tank is empty).

This is a legal obligation: $50-100.

Installation fee

Charged to install a propane tank.

Usually included if tank is leased.

Tank rent fee

Offsets dealer maintenance costs for a company-owned tank.

Usually depends on tank size: $25-225.

Reconnect fee

Charged when customer propane supply has been shut down because of a payment issue once the issue has been solved.

None.

Late fee

Offsets the costs of processing a late payment.

Likely to be a percentage of your last propane bill.

Returned check fee

Offsets the administrative costs and bank charges for processing a check linked to an account with insufficient funds.

Likely to be a set fee of around $30.

Hazardous Material and Safety Compliance Fee

All propane dealers require customers to pay a fee to cover expenses linked to safety training and compliance. This is often called the HAZMAT fee, which stands for hazardous material (of which propane is one). This fee varies between $10 and $20.

Concretely, this offsets the costs propane dealers incur when they train their employees to respect and uphold the highest safety guidelines in handling and delivering propane or in maintaining propane-related equipment, such as tanks and appliances. The HAZMAT fee includes some customer training as good propane dealers all explain that although propane is safe, there are ways to react if they smell gas or if they suspect a leak.

All the important propane dealers are also members of national and state propane gas associations. Several are members of the Propane Education and Research Council. These entities offer various safety courses for propane dealer employees. The HAZMAT fee also helps cover such training expenses and is a guarantee of the employees’ safety skills.

Fuel surcharge

Propane gets delivered in trucks called bobtails. Propane dealers are therefore vulnerable to fuel price hikes in the same way all vehicle users are. To offset these costs, most propane dealers include a fuel surcharge in their customers’ propane bills, which varies according to the price of fuel. Sometimes, this is included in the propane price per gallon rather than as a distinct item on the bill.

Delivery fees

Propane dealers sometimes charge delivery fees on top of the propane price. However, online reports suggest that most propane dealers (just under two-thirds) either deliver propane for free or charge $10 or less. There is no correlation between the delivery fee and the amount of propane ordered, the propane price, or whether the tank is leased or owned. All the more reason to check and negotiate this fee with propane dealers from whom you request quotes.

Minimum delivery and low-usage fees

As you enter into a propane supply agreement, propane dealers will estimate your propane usage, which will help determine the price you pay per gallon at each delivery (the price fluctuates with the market between deliveries unless you have a fixed pricing plan). However, if you order less propane than anticipated or if you order a particularly low amount of propane, you are likely to be charged a minimum delivery or a low usage fee. This fee can be relatively high (up to $150 for Ferrellgas, for example) and it is advisable to check what the minimum delivery is and the applicable fee as your request quotes from different propane dealers.

Off-route and special delivery fees

Propane deliveries are scheduled according to the bobtail truck driver’s itinerary. If you place a late order for propane to be delivered off this planned delivery route, you are likely to be charged an off-route delivery fee to compensate for the unplanned detour and its associated costs. The off-route delivery fee varies depending on where the delivery is made when considering the planned delivery trajectory (up to $150 for Ferrellgas).

Similarly, if you have or are about to run out of propane and need propane urgently and after hours, all propane dealers charge a special or emergency delivery fee. This fee can amount to several hundred dollars (Ferrellgas charges a maximum fee of $200), to which you should add the cost of a leak test (amount depends on local labor rates) since all gas supply interruptions require your propane company to inspect your system for gas leaks for safety reasons.

Termination fees

If you move homes, change propane dealers with a leased tank or need to have your propane tank moved or removed for any other reason, you will be charged a pump-out fee if your tank is above 5% capacity. If your tank has more than 5% propane it is illegal to move it without first draining excess propane. The pump-out fee typically depends on local labor rates. Propane dealers sometimes offer to buy excess propane back from customers but the price paid is never very high and it is better to use as much propane as possible before asking for the tank to be moved.

Similarly, propane dealers charge a closeout fee to cover administrative costs associated to terminating a contract (around $30). And if you decide to end your contract before the envisaged date, the dealer will charge you an early termination fee to offset propane they might have sold you had you stayed with them until the end of your contract (around $100).

Tank installation and rent fees

If you lease your propane tank from a propane dealer, you are not usually charged tank installation fees. However, if you have bought your tank, propane dealers may charge local labor rates to install your tank. It is more expensive to have an underground than an aboveground tank installed since underground tanks require a trench to be dug and it is a lengthier process.

Tank rent fees depend on tank size and on each propane dealer. They vary between $25 and $225 per year and depend on size. The advantage of renting a tank is that maintenance tends to be included in your propane supply agreement. If you have purchased your tank you will not be charged rent fees but maintenance will be charged at local labor rates.

Late payment fees

Propane dealers charge various fees if you have not paid your bill on time or if there is an issue with your payment. Depending on when your payment was due, they may lock your gas supply and charge a reconnect fee for unlocking your tank. The reconnect fee depends on labor rates. Late payment also lead to propane dealers charging a late fee, which will be a percentage of your last propane bill applied to every month the bill is not paid. Last, if your payment check bounces, propane dealers tend to charge a returned check fee to cover bank expenses incurred (between $20 and $30).