The wholesale benchmark — Mont Belvieu
Every US propane retail quote starts with the wholesale spot price at Mont Belvieu, Texas — the largest US propane fractionation and storage hub. The Mont Belvieu spot is quoted in cents per gallon and trades continuously. Wholesale prices feed regional terminal prices, which feed retail quotes.
The retail markup
Dealers add a retail markup of typically $1.50-$2.00 per gallon to the wholesale price. The markup covers transport from terminal to local depot, storage, delivery to customer, equipment depreciation, customer service, operations and margin. Markup tends to be tighter in dense competitive markets and wider in low-competition rural routes.
Route-level adjustments
On top of the wholesale + standard markup, dealers adjust for:
- Tank size — larger tanks accept larger fills, which are cheaper per gallon to deliver
- Fill volume — 300+ gallons gets meaningfully better rates than smaller fills
- Route density — addresses on a dense suburban route price better than isolated rural addresses on long routes
- Contract type — pre-buy and capped contracts shift price risk and adjust the headline rate accordingly
- Local competition — markets with strong independents see more competitive quotes from nationals
Why two customers at the same address can pay different rates
Even with the same dealer at the same address, two customers can pay different per-gallon rates depending on tank size, contract type, fill volume and negotiating leverage. This is unlike utility pricing, where the same residential tariff applies to all customers in the same class. The flexibility cuts both ways: it lets dealers respond to your specific situation, but it also means customers who don't negotiate often pay rack rates.
FAQ
Why don't propane companies publish their prices?
Because pricing is account-specific. A national rate sheet would not capture the route-level adjustments and contract-type variations that drive any individual quote. Dealers do publish corporate-level guidance on pricing structures, but specific numbers require a quote request.
Is propane retail pricing regulated?
No — unlike natural gas distribution. US propane retail is competitive and unregulated at both federal and (most) state levels. About 10-15 states have consumer-protection rules on specific contract terms (anti-fill, disclosure) but no state sets propane tariffs.