How much is the coronavirus affecting propane gallons delivered?

The novel coronavirus has impacted everyone in the U.S. It has led our country to declare a National Emergency and caused the unfortunate cancelation of our industry’s national conference in Nashville.  While propane’s essential status to keep people warm, keep them fed, and ensure reliable back-up power has been granted, we were curious how COVID-19 will affect propane demand over the next few weeks or months.  And how it compares to previous years.

This is our current look at the impact on Delivered Gallons to date.

Our Research

At Tank Utility, we have the fortunate position of viewing anonymized aggregated daily readings from our propane tank monitors across the country that enables a unique real-time view of national propane consumption and how COVID-19 might be affecting the propane industry.  

The graph below shows year-over-year propane consumption per week adjusted to each season’s peak demand for the given year.  Basically it shows the seasonality of propane consumption year to year. 

Assuming propane demand follows a similar pattern throughout the year then a deviation from this pattern may indicate the COVID-19 influence. 

Source: Tank Utility monitor data from 6/1/17 to 3/1/2020

You can see that the last two weeks were a difficult time for propane as weekly demand dropped to 60% of this year’s peak week (achieved Jan 17), even lower than the 75% of peak achieved last year during the same week.  A drop from the peak can be expected due to the seasonal transition from winter to spring but it is still 19% lower than last year.  

So is this an early sign of the coronavirus impacting demand?  Let’s dig a little deeper. 

The graph below shows the number of heating degree days (HDDs) by week over the past two years.

Source: American Gas Association, NOAA

When you consider last two weeks average Heating Degree Days (HDDs) were 26% warmer than last year the drop in gallons appears to be more likely an “early spring / shorter winter” effect than one due to the pandemic.  We’re not removing the possibility that we could be seeing effects from the pandemic, but viewing last week’s demand with this additional information certainly helps put the usage into context. 

So What’s Our Take?

Well, it’s too early to tell. We are just seeing the impact of coronavirus policies impact our professional and personal lives and the lives of our customers with lockdowns in many areas.  That being said, there is a convincing argument that seasonality and a warmer winter can explain most of the drop in gallons delivered this past week.

We believe this is something to monitor. The next handful of weeks will help us better understand how the pandemic is affecting our industry. We’ll continue to provide updates on the with a weekly review of these statistics and more statistics as the situation evolves.

Please note: The results shown are on an aggregate basis for monitors across the U.S. and fuel delivery companies can experience different deviations depending on their customer mix and geography.