Nov. 18--Imagine driving into your local gas station and seeing the advertised price for a gallon at $2.10, but when you get out of your car to fill up, the attendant stops you, opens up the pump, and resets the price to $2.50 a gallon.

"Sorry," the attendant would sheepishly explain, "but this is the price you agreed to pay last summer."

That's the situation confronting the majority of local residents who will heat their homes this winter with propane gas, and it's causing some consternation among those who sell propane to homes across the area.

"It's been a goofy year from an energy standpoint," said Scott Brockelmeyer, a spokesman for Ferrellgas Partners LP, a national propane retailer in Kansas with branches in northwest Ohio and southeast Michigan.

"What we're telling our customers is that in seven out of the last eight years, entering into a buying program has been to their advantage, and they may end up winning in the long run before the season is up."

The price of propane tracks closely with the price of crude oil, which has fallen dramatically since reaching a record high of about $147.27 a barrel on July 11. Yesterday, the price of oil was $56.50 per barrel, a drop of 60 percent in four months.

The problem is that most heating customers -- particularly those who heat with liquefied petroleum gas and home heating oil -- have been trained in recent years to sign up for contracts in the summer, when demand for these products is much lower.

But this year, because of the spike in crude oil prices, the contract price for winter propane shot up to $2.69 a gallon or more, and looked to be heading nowhere but up as the summer wound down.

That was when Jim McVicker, vice-president for operations at family owned Reliance Propane and Fuel Oil in the Trilby area had to decide what to do for his customers.

"We did it in mid-July, not knowing what would happen, and about a month later, the bottom fell out," he explained. "We're doing everything we can with our customers to try and help them out," includ-ing allowing customers who locked into season-long contracts to purchase at the current market rate, which yesterday was 19 cents cheaper than the pre-buy rate, he said.

According to the federal Energy Information Administration, the average price for propane in the Midwest region for October was $2.30. That's about 18 percent more than last year at the same time, and 33 percent higher than in October, 2006. Propane users are expected to spend $1,941 this winter to heat their homes, or about $174 more than last year.

Other propane retailers were contacted for this story, but declined to speak on the record about the price fluctuations.

Even though propane prices have fallen since summer, people will continue to pay more to heat their homes this winter.

Mr. McVicker said his pre-buy contract customers -- those with signed contracts through the Sept. 30 -- agreed to a price of $2.59 per gallon for the winter, compared to a spot-price yesterday of $2.40 a gallon. Last year, Reliance offered a contract price of $1.85 per gallon, and the spot price climbed as high as $2.20 over the winter.

"We've tried to get people on budgets, and taken other measures, to help them anyway they can to make it more feasible for them," he said.

Contact Larry P. Vellequette at: lvellequette@theblade.com or 419-724-6091.

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