The price of propane gas explained

At OK GAS, we understand that understanding the pricing structure of propane gas is important to our customers. We are committed to transparency. Over the years, we at OK GAS have gained a wealth of experience in the propane gas industry. Our professionals have extensive knowledge of how market dynamics affect propane gas prices.
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The evolution of excise taxes on propane gas
Over the past decade, excise taxes on propane gas have increased significantly.

What factors affect the price of propane gas?

The price of propane gas depends on several factors. These are production costs, transportation costs, government levies on suppliers, taxes on consumers, and market supply and demand. Below we explore these factors in more detail.

  • Production costs: The costs of extracting, producing and refining propane gas are the fundamental elements that determine the price. We strive to keep these costs as low as possible without sacrificing quality.

  • Taxes: Like all other products, the government levies taxes on products consumers buy.

  • Transportation costs: The distance between the production facilities and the delivery location can affect the price of propane gas. At OK GAS, we constantly optimize our logistics processes to minimize transportation costs.

  • Market demand and supply: External market factors such as propane gas supply and demand also play a role in pricing. Consider the demand for natural gas and government policies related to sustainability.

  • Government levies: These are both excise and stock taxes. The chart below shows how excise taxes have evolved in recent years.


You can find the exact cost per 1,000 kg on the tax authorities' website.

Propane gas price increase 2022

The year 2022 was a rollercoaster for the propane gas industry. For a period, the propane gas price was significantly more attractive than that of natural gas. The war in Ukraine restricted the supply of natural gas from Russia. This drove up the price of natural gas, which in turn increased demand for propane gas. It created a tipping point in supply and demand.

 

A tanker truck drives past a propane gas tank in someone's yard

The impact of government taxes on the price of propane gas

Since July 1, 2023, as a propane gas supplier, we pay € 344.74 per 1,000 kilograms of liquefied petroleum gas (propane). In addition, we also pay € 8 per 1,000 kilograms of stock levy. Together a sum of € 352.74 excluding 21% VAT per 100 liters. So as a supplier we pay (converted) to the government € 0.1799 per liter excluding VAT in taxes.

As a supplier, we fill tanks at our customers in liters. So for a propane refill of, say, 1,000 liters, you pay 1,000 x €0.1799= €179.90 in excise and inventory taxes.

What do we expect from 2024

As a propane gas supplier, we expect the price for propane gas to remain stable. In fact, supply and demand are more stable. This has everything to do with the price of natural gas. Because despite the fact that there are still geopolitical tensions in both Ukraine and Israel, we expect a more stable natural gas price.

The Netherlands has had a year to build up natural gas reserves. This allows them to continue to supply Dutch households with natural gas this winter. In addition, there is currently still a price cap.
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Why choose OK GAS?

OK GAS supplies propane gas at a competitive price. Please contact us for a free consultation.