MFA Oil

The MFA Oil Company is one of the United States’ largest propane retailers. Founded in 1929, this farmers’ cooperative with 40,000 members started its operations in Missouri but has expanded and now operates in six states (Arkansas, Indiana, Iowa, Kentucky, Missouri, and Oklahoma) through 140 outlets. As of 2012, it had 140,000 customers and is still expanding by acquiring smaller propane companies (three in 2012).

MFA Oil summary

MFA Oil propane prices

MFA Oil’s six delivery states are in the Midwest region, which is one of the cheapest regions for propane in the country. At the time of writing (March 2013) MFA Oil charged $1.99 per gallon to fill a 500-gallon rented propane tank to 80% capacity. Yet the most important is ensuring you are not too far from propane price trends in your region.

Graph: Midwest propane price trends, 2010-2013. (Source: US Energy Information Administration)

However, like all propane companies, MFA Oil propane prices depend on propane usage (the higher the usage, the lower the price) and when the delivery is requested (if in winter, prices are higher). Therefore, it is crucial to find out what price MFA Oil offers as you compare propane companies and select the one that best suits your needs.

MFA Oil delivery options

MFA Oil offers the two traditional options for propane delivery:

• Customers can order propane whenever their tank level falls under 30%. This enables customers to plan deliveries not only according to their usage needs but also according to propane pricing if tank size allows. However, customers on will-call run the risk of running out of propane or of having no other option than to order propane when prices are high if their propane level runs too low in winter.
• MFA Oil encourages customers to request that propane be delivered to their tank automatically (automatic delivery). On the basis of the home’s usage estimate, MFA Oil will work out when its customers need propane and deliver it accordingly. However, the price charged for each delivery will be that of the MFA Oil daily market price on the delivery day and it is in customers’ interest to regularly check what that price might be to ensure they are being charged fairly with respect to the average regional prices.

MFA Oil payment and billing

MFA Oil offers customers a pre-buy program. With this program, the amount of propane a home is likely to need is determined beforehand. This estimation rests on several factors:

• The more occupants a home has, the higher the propane usage is going to be.
• The more appliances run on propane, the more propane gallons a home is going to need.
• The less insulated a house is, the more propane a household will require.
• The colder the climate, the more propane will be necessary.

Based on these calculations, MFA Oil customers can be offered a price for their year’s propane usage estimate. This enables MFA Oil to buy the corresponding amount of propane wholesale. Consequently, customers who select this option pay a fixed price for their propane and are not vulnerable to market price fluctuations.

The disadvantage of this option is that MFA requires pre-buy customers to pay for their estimated usage up front: for homes with large propane consumption (over 1,000 gallons per year), this represents a significant investment in one installment.

Budget billing is a service that allows MFA Oil customers to spread their propane delivery bill over several installments. Remember: filling a 500-gallon propane tank at the Midwest average propane price for the last week of December 2012 ($1.69/gallon) amounts to $676. It can be convenient to spread this out over several months, especially as you order propane for the heating season.

MFA Oil propane tanks

MFA Oil offers 300- and 500-gallon tanks for rent. For a yearly fee ($40), MFA Oil will install and maintain your propane tank.

Most American households using propane as a primary source of energy require a 500-gallon tank. With MFA Oil, you should decide whether you need a larger size tank to better plan propane deliveries. Indeed, a larger tank might enable you to purchase more propane in the summer months and benefit from the lower summer prices (prices rise in winter).

Another question you should ask yourself is whether you prefer to rent a tank from MFA Oil or buy your own propane tank from a manufacturer. Although purchasing a propane tank represents a significant investment at the onset ($450-3,500 depending on tank size and whether it is aboveground or underground), it can enable you to benefit from slightly lower propane prices, have a larger tank (since MFA Oil does not offer tanks beyond a 500-gallon capacity), and save on the yearly rent fee.

MFA Oil fees and charges

Unlike other propane companies, MFA Oil does not list fees and charges that apply to safety and training, special deliveries or late payment (for example) because it claims there are none. The company believes that since training is compulsory to comply with safety standards and regulations there is no need for a special fee, for instance. All fees and charges are therefore reflected in the propane price per gallon.

MFA Oil services

The company offers customers two essential services:

• If you run out of propane, regulations require you to have a leak test for safety reasons. This aims at ensuring there is no leak risk that stems from the interruption of your propane supply.
• It is advisable to have your entire propane system inspected once a year to ensure it is functioning properly and does not pose a safety risk. Inspection is a service offered by MFA Oil.

MFA Oil community involvement

Through the MFA Oil Foundation, MFA Oil is involved in the communities of its members and employees. Eligible nonprofit and education organizations can obtain a grant of $2,000 maximum if their application is approved by the Foundation’s board of directors. Potential customers who consider this a priority can see whether their community might be concerned by calling 573-442-0171.