LPG Gas Price Explained

by | Jun 19, 2022 | LPG Prices, LPG

LPG prices can vary depending on the time of year, so it’s important that you keep up with the latest news and trends in the industry.
If you are a part of the over 2.1 million households in the UK that use LPG as your primary home heating fuel, you might have already been caught up in the recent price hike by suppliers.

This is essential to keep in mind if you are looking for a new supplier, as there are quite a few of them out there. However, finding the right one can be tricky, especially if you don’t know what you are looking for.

If you are looking to find out the best LPG gas price and supplier, we have all the answers for you. The following article will help you understand how LPG works, why the price hike, and how it compares to other types of fuel.

Essential Facts About LPG Gas

LPG stands for ‘Liquefied Petroleum Gas,’ and it is a fossil fuel used in many ways around the world—from cars to homes and even industry. In fact, it is the second most commonly used fossil fuel after petrol (gasoline).

When it comes to residential usage, however, LPG gas is often more convenient than electricity or other sources of heat because it can be stored easily at home and transported easily by truck or car.

It is also more efficient than other fuels when used in appliances like cookers, ovens, heaters, or boilers.

Why Do People Prefer Using LPG?

LPG gas is heavily used in residential homes and commercial premises where there is no mains supply gas. It’s often used as an alternative fuel source by people who live in properties where mains supply isn’t available or as an alternative to other types of fuel like coal or oil.

Besides, LPG (Liquid Petroleum Gas) is also used by people who want a more environmentally friendly option than traditional fossil fuels like oil or coal when heating their homes.

Some households also prefer using LPG because it can be stored safely in your home without any special precautions needed, unlike other fuels such as natural gas or petrol/gasoline.

This makes LPG a prevalent choice among people who don’t have access to mains gas supply and need an alternative fuel source for heating their homes – especially during winter months when temperatures drop significantly!

So, if you’re looking for a more reliable LPG supplier, maybe your current supplier is unreliable, or you’re just looking for a cheaper option.

Whatever your reason for wanting to switch, we’re here to help! We’ve got all the information you need about LPG gas prices and suppliers in the UK.

How Much Does LPG Cost?

Have you ever wondered why the price of LPG gas has risen so high? We’re here to help!

Your typical home heating system uses mains gas or oil. But if you are on a mains gas supply and want to use LPG instead, you’ll have to pay more for it. LPG is purchased from oil and gas refineries by LPG supply companies such as ourselves. The price we pay is ultimately determined by a combination of: oil price, exchange rates, demand, and refinery output / availability.

So what happens when the price of oil goes up? The LPG gas price goes up too! This means that even if your current supplier doesn’t increase its prices, you’ll still be paying more for your fuel than before.

But there are other several factors affecting how much LPG costs. They include:

  • The size of your tank;
  • How much LPG you use;
  • Whether or not you have access to mains gas supply;
  • Whether or not your home already has an LPG boiler installed, if so, then this could mean that there are no additional installation costs involved either!

With us as your supplier, we can guarantee that our prices won’t go up as often as other companies.

I am in a Fixed Price contract can my Gas Price Increase?

All LPG suppliers have in their terms and conditions that if the wholesale price of LPG rises above a certain value e.g 30% of the date of when you signed the contract, the price you pay for LPG will be increased. For example if you fixed in a deal at 34 p /litre and 6 months later the wholesale price has increased from 25 p/litre to 38 p/litre, the price you pay would ultimately be increased. Pure LPG offer a unique pricing formula to take into account recent volatile wholesale energy prices, we are offering a variable priced offer of a fixed p/litre margin e.g. 10p, that tracks the wholesale price of LPG. This always provides the customer with savings throughout the life of the LPG contract as when the wholesale prices decrease the price you pay will decrease.

What Affects the Pricing of LPG cost?

Since LPG is commonly used in homes as cooking fuel and fossil fuel that can be used as a fuel for many different things, its price mostly varies.
The price of LPG can vary greatly depending on the location and time of year. In the UK, it is more expensive to use LPG during winter when demand is greater than supply. During these times, prices tend to fluctuate more often than they do during other seasons.
In addition to seasonal changes in price, other factors affect LPG prices:

  • The type of gas you’re buying (LPG has three types: propane [C3H8], butane [C4H10], and isobutane [C4H10])
  • Your location
  •  The size of your tank (the larger your tank, the cheaper your cost per liter will be).

When you’re looking to buy LPG gas tanks for your home, you should also consider some things before making any decisions. The price of LPG is often higher than electricity or other fuels and may vary depending on where you live in the country or region. You should also be aware that there are different types of cylinders available, so make sure you find the right one for your needs before buying any products!

The UK LPG market

It is important to understand the UK gas market, as it is the base on which LPG supply prices are based.

In order to understand this, you need to know what makes up an average LPG price:

  • The spot price of oil
  • The cost of distribution of LPG (often regarded as a fixed fee)
  • The cost at which suppliers have bought their supplies from refineries
  • Exchange rates – As oil is traded in US Dollars, the £ against the $ exchange rate directly affects the price of LPG
  • Refinery output / availability – there are several oil and gas refineries in the U.K, when one or more is offline due to maintenance or breakdown this puts increased pressure on the other available refineries. This leads to an increased demand of LPG from the available refineries hence an increase in price.

How Do We Calculate LPG Prices?

Most consumers wonder how the price of LPG gas is determined. Well, it’s a common question and one that we get asked a lot. We’re here to give you an answer!

LPG gas is priced by the supplier based on supply, demand, and cost of production—and it can also be affected by other factors like a change in exchange rates. The price of LPG gas is set by the supplier after taking into account all these factors.

The cost of producing LPG is dependent on exchange rates and the price of oil; if oil prices rise, then so does the cost of producing gas. Other factors include the cost to purchase / install your tank (most LPG suppliers purchase the tank from the previous supplier or pay the capital cost of the installation themselves), the pay back period of the cost of the tanks is calculated into the gas price.

We also take into account distribution costs, the fuel we use (Diesel) in our HGV delivery tankers and additives such as Ad Blu has increased significantly as we have all seen by the prices we pay at the pumps.

When this happens, there will be less money left over for your supplier to pay for other costs associated with providing their services— overheads such as staff salaries and vehicle maintenance. We need these extra funds because we have bills to pay just like everyone else!

How Does An Energy Supplier Affect LPG Gas Prices?

LPG gas price is a hot topic for many people in the UK. The cost of LPG gas has been rising steadily over the last few years, and significantly in the last 6 months and many people are struggling to make ends meet as a result.

The main reason for the recent significant increase in wholesale LPG prices is due to the war in Ukraine, and reduction of Russian oil imports this has significantly increased the oil price which is the main driver of LPG prices. Alongside this the weaker pound exchange rate has made things worse. But one factor that hasn’t received much attention is how an energy supplier can affect your LPG price.

It’s important to know this information because there are ways you can reduce the amount of money you spend on fuel – and it doesn’t involve switching providers!

It’s worth noting that not all energy suppliers charge the same amount for LPG, so finding one with a low rate could save you hundreds if not thousands of pounds each year. Whether you want to switch propane gas supplier or get a better price gas cylinders Pure LPG are here to answer all your questions.

What Will You Need To Get A Quote?

If you’re looking to get a quote for LPG gas, there are several things you’ll need to have on hand.

First and foremost: your postcode. Your postcode allows us to determine what existing customers we have in your area, the more customers we have in your area the cheaper the price of LPG as it saves on distribution costs. If you are in a very remote location far away from any of our existing customers, price per litre would be higher.

Your annual usage – please provide us with an estimate of how much gas you use per annum or how many fills you have per year and the amount delivered per fill. We’ll use this number as a baseline for our estimate so that we don’t miss any details later on down the line!

For domestic properties it would also be helpful if you let us know the age of the installation of the tank and when it last went a 10 or 20 year test. The cost of purchasing tanks can vary greatly depending on the age, location and last test date. Your LPG supplier can pay anywhere from a few hundred pounds to over £3,000 to take over your tank.

Is It Cheaper to Use Oil Or Electricity For Heating?

This is a question that many people ask themselves when trying to decide what kind of fuel to use. It’s difficult because there isn’t a single answer—it all depends on where you live, how much fuel you use, and what your other options are.

In general, natural gas is cheaper than electric heating options such as heat pumps given the increase in electricity prices. Let’s take a look at some other factors that might affect your decision:

  • Costs: How much will it cost to install and maintain?
  • Availability: Do you have adequate space for a ground source heat pump.
  • Repairs and maintenance: Is boiler repair covered under warranty?

With these considerations at hand, it’s easier to make a candid decision based on your condition to know whether it costs more or less to use gas for heating.

Why do LPG prices change so often?

The LPG market is very competitive. The price of petrol and diesel are good indicators of the price of LPG. When petrol and diesel prices increase so does the wholesale LPG price. This is because LPG is a by-product of the refining process for these fuels (it comes from the same barrel of oil), so if the cost of petrol and diesel goes up, then so does LPG’s price.

Current Wholesale LPG prices

The wholesale LPG price has risen steadily over recent years but has increased sharply in recent months significantly so since the conflict in Ukraine. The LPG gas price chart below highlights the increase in wholesale prices – .

Wholesale LPG Price UK

Different rates of LPG and Autogas, fuel duty and VAT

There are different rates of VAT and whether or not fuel duty is applicable depending on the application of LPG. For heating purposes there is no fuel duty, when LPG is used for vehicles in road fuel (e.g. Autogas) 15.8pence / litre is added to the wholesale price of LPG which is fuel duty given to the government. Also Autogas is subject to the VAT rate of 20%. Propane / LPG used for heating is subject to 5% VAT.

Conclusion

LPG gas is a convenient, reliable, and safe fuel that can be used by almost every household. For industrial / commercial users LPG is the perfect fuel for a number of application from providing space / process heating to powering fork lifts. If you’re looking for a reliable LPG supplier, reach us at Pure LPG for an unending supply.

 

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