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- 08 Mar
More alternative fuels gaining mindshare – this time it’s Propane
An NBC News article published in their Online Business section discusses the addition of Propane to the list of alternative fuels being considered for vehicle retrofitting.
The home satellite provider DISH Network Corp has announced they will run 200 of their trucks on Propane. The DISH Network Corp expects a 55 percent reduction in fuel costs for the Ford E-250 cargo vans that will run on propane – amounting to a saving of about $2,500 per vehicle per year. There are more than 13 million vehicles using Propane worldwide but Propane is a niche product in the United States.
But over the past 3-4 years, the wholesale cost of Propane has dropped in half, and Propane production has increased nearly 50%. The cost of adding a Propane fueling station is less than $50,000 and takes less than one day. That makes it much less of a commitment than adding CNG or LPG fueling stations.
According to the US EIA map of the alternative fuel stations in the lower 48 United States, the number of Propane stations is second only to Electric, and just ahead of E85 stations. But while Electric stations are concentrated in the urban areas on the coasts and Great Lakes, Propane stations are more widely distributed across the whole US, including Texas and the Mid-west.
As we monitor the growth of alternative fuels in the retail fuel management industry, retail fuel pricing managers would be wise to consider adding Propane to their product portfolio as a market differentiator, and an opportunity for high fuel margins.
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