2024 National Propane Industry Survey Results Released by Gray, Gray & Gray

Canton, MA — Aug. 12, 2024 — Gray, Gray & Gray LLP, a consulting, accounting and business advisory firm for the propane industry, has released the results of the firm’s Propane Industry Survey. The survey has served as an important benchmark for propane and fuel oil marketers throughout the U.S. since its inception. 

The 2024 Propane Survey results are based on reported operational and financial data for the heating season spanning from April 2023 through March 2024. This year’s survey once again featured additional operational insights from Angus Energy, an industry leader in data analytics. 

“While propane companies are not immune to the economic challenges facing the broader business world, most seem to be successfully managing through the turbulence,” says Marty Kirshner, CPA, MSA, the partner leading Gray, Gray & Gray’s Energy Practice Group. “The keyword this year seems to be ‘efficiency,’ with an increasing number of dealers focusing on improving their operational performance in order to remain competitive.” 

Some of the highlights from the results of the 2024 Propane Industry Survey include: 

• Technology is increasing in importance for a company to remain competitive. Sixty-one percent of survey respondents reported that they “need to keep up with the best practices in the industry” when it comes to adopting new technologies, while 29% say technology will “impact my decision-making only when I see the results.” 
• Propane marketers remain confident in their industry and their own future. Eighty-two percent of dealers report they are either “highly confident” (39%) or “confident” (43%) in their ability to remain a viable business, while 40% say they are in the market to make an acquisition in 2024. 
• Further evidence of optimism: 54% of dealers anticipate adding at least one to three new vehicles to their fleet in 2024, with another 8% planning to grow by four to five new vehicles, 4% planning for 6-10 new vehicles, and 8% looking to put 11+ new vehicles on the road. 
• But nobody is standing still. Dealers are working hard to increase their per gallon profit margins (88) by adding new services (22%), focusing on improving efficiency by making fewer — but larger — deliveries (68%), optimizing fleet operations through better delivery planning (69%). 
• More dealers are paying closer attention to planning for the future. Thirty-six percent say they have a strategic business plan in place for the next two to five years, up 4% over 2023; and 56% have a business succession plan in place, up 5% from last year. 

Complete results of Gray, Gray & Gray’s 2024 Propane Industry Survey are available at www.gggllp.com or by calling (781) 407-0300. 

Propane Industry Survey — Overall Results 

Number of states in which you do business: 

• 1 State: 66% 
• 2 States: 23% 
• 3 States: 7% 
• 4 States: 2% 
• 5+ States: 2% 

Total number of full-time equivalent employees: 

• 0: 0%
• 1-5: 11% 
• 6-10: 12% 
• 11-20: 21% 
• 21-30: 17% 
• 31-40: 11% 
• 41-50: 8% 
• 51+: 20% 
• NA: 0% 

Number of customers per service technician: 728 

Total number of vacant positions:

• 0: 32%
• 1-5: 58% 
• 6-10: 8% 
• 11-20: 1% 
• 21-30: 0% 
• 31-40: 0% 
• 41-50: 0% 
• 51+: 1% 
• NA: 32% 

Total number of new positions you foresee needing to fill in 2024: 

• 0: 24%
• 1-5: 63% 
• 6-10: 5% 
• 11-20: 6% 
• 21-30: 0% 
• 31-40: 1% 
• 41-50: 1% 
• 51+: 0% 
• NA: 24% 

Are your employees cross trained as drivers and technicians? 

• Yes: 72% 
• No: 28% 

What is the HOURLY rate you pay? 

• Controller: $48.94 
• Customer Service Representatives: $21.92 
• Delivery Drivers: $26.41 
• Dispatchers: $27.63 
• General Manager: $53.39 
• HR Professional: $38.36 
• IT Professional: $47.79 
• Salesperson: $33.24 
• Service Manager: $42.86 
• Service Technicians — Air Conditioning: $32.19 
• Service Technicians — Heating: $28.82 

What is the percentage commission that you pay a salesperson for bringing in a new equipment installation based on sales price? 

• 0-5%: 76% 
• 6-8%: 9% 
• 8-10%: 12% 
• 10% or more: 3%  

What percent did your payroll increase from the prior year? 

• 0-3%: 25% 
• 4-5%: 31% 
• 6-7%: 23% 
• 8% or more: 21% 

Outside of payroll what operating expense has increased the most in the last 1-2 years? 

• Cybersecurity insurance: 0% 
• Environmental: 1% 
• Health insurance: 26% 
• Liability insurance: 34% 
• Updating software: 8% 
• Vehicle: 26% 
• Other: 5% 

What was the biggest change you made to retain employees in the current year that you have not done previously? 

• Additional paid time off: 3% 
• Bonuses (sign-on, referral, etc): 3% 
• Flexible work schedules (4 day work week, 40 hour work weeks, ability to leave early, reduced hours): 7% 
• Improved employee relations and training: 4% 
• No changes made: 26% 
• Raises/wage and salary increases (inflation, mid-year, out-of-cycle, incentive-based): 54% 
• Other: 3% 

Does your company currently have “golden handcuffs” key employee retention plans in place? 

• Yes: 14% 
• No: 86% 

Do you recruit from vocational or trade schools? 

• Yes: 45% 
• No: 55% 

What percentage of the health insurance benefit is paid by the employer? 

• 0-49%: 15% 
• 50%: 7% 
• 51-74%: 16% 
• 75-99%: 27% 
• 100%: 35% 

If you lost customers last year, to what do you most attribute their leaving? 

• Lost to competitor with lower prices: 54% 
• Lost to competitor with similar pricing: 7% 
• Lost to gas conversion: 14% 
• Lost to heat pump conversion: 11% 
• Lost due to other reasons: 14% 

How long have your current customers been with your company?

• 0-1 year: 8% 
• 1-2 years: 8% 
• 2-3 years: 8% 
• 3-4 years: 7% 
• 4-5 years: 6% 
• 5+ years: 63% 

How are you protecting your business against a cyberattack and data loss? 

• Encrypted cloud-based data storage: 57% 
• Anti-malware software/Endpoint protection: 73% 
• Secure data backup for disaster recovery & business continuity: 69% 
• Written information security plan (WISP): 30% 
• Staff training: 54% 
• Cybersecurity insurance: 46% 
• Not sure what I should be doing: 4% 
• Other: 4% 

In my opinion, the embracing of technology will: 

• Impact my decision-making only when I see the results: 29% 
• Make me think that I need to keep up with the best practices in the industry: 61% 
• Not impact my decision-making: 10% 

What products or services are you considering adding in 2024 that you previously weren’t offering? 

• Generators: 17% 
• Plumbing: 21% 
• HVAC: 14% 
• Fuel Oil: 1% 
• Electricity Conversion (heat pump): 8% 
• Pest Control: 1% 
• Renewable Propane: 25% 
• Other: 44% 

What revenue sources do you currently have to offset the seasonality of your business? 

• Generators: 34% 
• Plumbing: 14% 
• HVAC: 45% 
• Fuel Oil: 30% 
• Electricity Conversion (heat pump): 29% 
• Pest Control: 2% 
• Other: 39% 

What is the most impactful business operations change you made in the last 12 months (TOP 5 RESULTS)? 

• Upgrading and adding new technology and/or back-office software 
• Expanded service capabilities 
• Cross-training and/or adding new staff 
• Business acquisition and expansion to new locations 
• Adding or expanding tank monitor usage 

Are you considering any of the following in the next 12 months? 

• Key employee plan: 18% 
• Merger: 7% 
• Acquisition: 40% 
• Sale: 7% 
• Upgrade software: 42% 
• Other: 13% 

Given environmental concerns and the political climate, how confident are you in your company’s ability to remain a viable energy provider? 

• Highly confident: 39% 
• Confident: 43% 
• Somewhat confident: 16% 
• Not confident: 0% 
• Unsure: 2% 

Have you implemented a succession or continuity plan for the next generation? 

• Yes: 56% 
• No: 44% 

Have you developed a strategic business plan laying out what your company will look like 2-5 years from now? (For example with threats such as electrification.) 

• Yes: 36% 
• No: 64% 

How many gallons did you sell during the 12 months ended March 31, 2024? 

Heating Propane – Residential 

• 0-999: 35% 
• 1m-4999: 49% 
• 5m-9999: 11% 
• 10m and over: 5% 

Heating Propane – Commercial 

• 0-999: 75% 
• 1m-4999: 20% 
• 5m-9999: 3% 
• 10m and over: 2% 

What is your company’s average gallons delivered per stop? 

• Avg. propane gallons delivered per stop: 182 
• Stops per hour: 1.9 
• Gallons per hour: 346 

What was your average margin for sales during the heating season that just ended? 

• Heating Propane – Residential: $1.42 
• Heating Propane – Commercial: $0.87 
• Grills: $2.59 
• Pool Heaters: $1.77 
• Autogas: $1.01 
• Agriculture: $0.75 
• Home Use (cooking, laundry): $2.48 
• Generators: $2.38 
• Other: $1.50 

What percentage of active customers are on a budget plan? 

• 0%: 4%
• 1-20%: 59% 
• 21-40%: 25% 
• 41-60%: 10% 
• 61% or more: 2% 

What percentage of active customers use a price protection plan? 

• 0%: 20%
• 1-20%: 42% 
• 21-40%: 22% 
• 41-60% 12% 
• 61% or more: 4% 

What percentage of your tanks have tank monitors? 

• 0%: 11% 
• 1-10%: 30% 
• 11-20%: 17% 
• 21-30%: 11% 
• 31-40%: 7% 
• 41-50%: 4% 
• 51-60%: 4% 
• 61-70%: 4% 
• 71-80%: 4% 
• 81-90%: 2% 
• 91-100%: 6% 

For Seasonal K’s, when did you switch from summer to winter this past year? 

• October: 26% 
• November: 24% 
• Other: 10% 
• I Do Not Know: 13% 
• I Do Not Use Seasonal K’s: 27% 

Do you switch Seasonal K’s at the same time every year? 

• Yes: 50% 
• No: 15% 
• I Do Not Know: 13% 
• I Do Not Use Seasonal K’s: 22% 

What is the average annual fee for your tank monitoring? 

Propane: $64.43 

What is the average renewal price you charge for a service contract on heating equipment?

Propane 

• $100-$200: 30% 
• $201-$250: 22% 
• $251-$300: 24% 
• $301-$400: 17% 
• $401+: 7% 

Average number of services calls per customer: 0.65 

What is the average hourly labor rate you charge for service? 

Propane 

• $75-$125 per hour: 53% 
• $126-$200 per hour: 40% 
• $201-$250 per hour: 6% 
• $251+ per hour: 1% 

Air Conditioning

• $75-$125 per hour: 20% 
• $126-$200 per hour: 53% 
• $201-$250 per hour: 20% 
• $251+ per hour: 7% 

Plumbing 

• $75-$125 per hour: 37% 
• $126-$200 per hour: 37% 
• $201-$250 per hour: 13% 
• $251+ per hour: 13% 

Pipeline Gas 

• $75-$125 per hour: 16% 
• $126-$200 per hour: 53% 
• $201-$250 per hour: 21% 
• $251+ per hour: 10% 

Other 

• $75-$125 per hour: 8% 
• $126-$200 per hour: 50% 
• $201-$250 per hour: 25% 
• $251+ per hour: 17% 

What percentage of customer propane tanks do you own? 

Above ground 

• 0-25%: 10% 
• 26-50%: 10% 
• 51-75%: 28% 
• 76-100%: 52% 

Underground 

• 0-25%: 50% 
• 26-50%: 10% 
• 51-75%: 4% 
• 76-100%: 36% 

How long is the average contract for customers with a contract on propane tanks (in years)? 

Above ground 

• 0-1: 45% 
• 2-3: 18% 
• 4+: 37% 

Underground 

• 0-1: 46% 
• 2-3: 11% 
• 4+: 43% 

Total current fleet size:

• 1-3: 9% 
• 4-5: 5% 
• 6-10: 24% 
• 11+: 62% 
• NA: 0% 

Total number of vehicles you anticipate adding in 2024: 

• 1-3: 54% 
• 4-5: 8% 
• 6-10: 4% 
• 11+: 8% 
• NA: 26% 

How many days are your delivery trucks on the road on average? 

• 1-30: 7% 
• 31-60: 0% 
• 61-90: 0% 
• 91-120: 2% 
• 121-150: 5% 
• 151-180: 7% 
• 181-210: 8% 
• 211-240: 10% 
• 241-270: 36% 
• 271-300: 8% 
• 301-330: 11% 
• 331-365: 6% 

Regardless of number of days on the road what is your daily average gallons delivered per truck? 

12,899 

If per customer consumption is flat or falling AND costs to deliver fuel are rising, how are you maintaining your overall profitability? 

• Increasing per gallon profit margins: 88% 
• Offering other paid-for services: 22% 
• Focusing on correcting my Ks: 25% 
• Looking for ways to make larger (and fewer) deliveries: 68% 
• Looking for ways to optimize the use of my fleet through better delivery planning: 69% 

Do any of your fleet vehicles currently operate on propane autogas? 

• Yes: 39% 
• No: 61%