Buying vs. Leasing my Propane Tank

It’s unsurprising that we have been witnessing increased propane usage across Ontario; being flexible, efficient and environmentally friendly, propane provides for a clean substitute and an economical step towards cleaner air. Accompanying its rise in usage and popularity, have been the questions regarding service, availability, and price.

Homeowners relying on this commodity to power their appliances can depend on the numerous propane suppliers in the Ontario region, and are also often presented with a choice concerning its storage. A question that almost every propane user will eventually encounter is:

Should I buy or lease my propane tank?

At Fuels Inc., we understand that the answer is highly dependent on the multiple factors that affect each prospective propane user differently and we will compare the two options in terms of flexibility, upkeep and cost in order to provide some insight for individuals faced with this purchasing decision.

Flexibility

Arguably the most compelling reason for purchasing rather than leasing a propane tank is due to the flexibility in selecting your own fuel supplier. Purchasing a propane tank empowers you with the ability to select among the different propane suppliers in Ontario and purchase propane that most closely resembles its true market value.

Leasing a propane tank will heavily limit your options, and restrict you to purchasing your propane from the lessor. A noticeable mark-up on the price of propane is accompanied with this condition, as this now becomes the supplier’s primary source of revenue.With a high variance in prices being quoted by different propane suppliers in Ontario, it may seem counterintuitive to enter in to a long-term commitment and restrict the purchasing flexibility provided by owning.

Falling out of favour with your current propane supplier can be problematic when leasing, and there are likely only two solutions: coordinating a transfer of ownership between your new and old supplier or purchasing the propane tank. These options are not always available, and at the very least can be time consuming; especially if your tank is located underground.

Upkeep

Although propane is a natural product which does not degrade, due consideration needs to be given regarding the ongoing maintenance of the propane tank. While it is common for propane tanks to last from 30 to 40 years, steps should be taken to maintain the structural and functional integrity of the tank. This is especially important if the tank is stored underground and susceptible to corrosion; which can cause leaks that may not be visible.

While leasing a tank delegates this responsibility to the lessor, there are multiple ways in which propane tank owners can reduce the hassle associated with the maintenance of their tank. Checking for rust, leaks and safety controls can seem daunting, but purchasers can have confidence in the numerous experts and qualified technicians which can assist them. This includes established equipment retailers like Fuels, which can provide expertise and a sound support system to their customers.

Propane tanks can also be insured, providing purchasers with a financial guarantee and protection against many perils, including fire and collision. Additionally, warranty on the tank, parts and labour can often be negotiated prior to the purchase, alleviating many of the costs associated with maintenance and providing propane tank purchasers with the peace of mind that is regularly afforded under a lease agreement.

Cost

Saving money on living expenses has always been top of mind for Ontarians; carefully reviewing expenses, and making informed, calculated purchasing decisions can be just one of many ways in which we can all cut down our monthly overhead.

While upfront costs are important to consider, we mentioned that purchasing a fuel tank provides you with the choice and flexibility to select your own fuel provider. This can often result in savings that dwarf the initial capital outlay. Even what may seem like a small price per litre discount can result in significant long-term savings, especially for propane users with a high monthly consumption. Uncertainty regarding future market movements and conditions alone often justifies the tank’s purchase; providing you with multiple options if prices are high, and not restricting your price quote to a sole supplier.

For those who prefer the monthly payment structure of a lease agreement, they can opt for a financing option, given that their equipment vendor can provide one.

The purchase price of a propane tank will also generally include the piping from the tank to the house, along with regulators, fittings, gas and other parts associated with installation; it is also customary for most tank vendors to fill the tank with propane upon installation. And although it may seem insignificant, when selling your home the propane tank will be included in the sale, alleviating the hassle for the next owner and providing a slight boost in your property’s value.

Final thoughts

There are benefits to both, and while a propane user’s first thought may be to lease their equipment, we have presented circumstances which should least of all be given some serious thought and consideration. Understanding the difficulty of selecting the appropriate option in confidence, Fuels is devoted to providing answers to your questions, and helping you select the right propane and equipment option in the greater Hamilton and Toronto region.

Greener diesel regulation

Overview

By law, Ontario requires fuel companies to provide more environmentally friendly diesel fuels, known as bio-based diesel fuels. This helps:

  • reduce air pollutants
  • improve air quality
  • cut greenhouse gas emissions in the transportation sector — the largest contributor of greenhouse gas emissions in Ontario

What is bio-based diesel fuel

There are 2 types commonly available:

  1. Biodiesel is a clean-burning renewable fuel made from vegetable oils, recycled frying oils, and animal fats. A vehicle using biodiesel-blended diesel emits lower amounts of greenhouse gases and other pollutants. You can use biodiesel-blended diesel fuel as you would diesel fuel, however, your vehicle may need additional maintenance.
  2. Renewable diesel is made from the same materials as biodiesel but it is processed differently. It is almost the same chemically as regular diesel. You can use it anywhere you would use regular diesel.

New diesel rules

Ontario is introducing rules to lower the environmental impact of diesel fuel. These rules will reduce air pollutants, improve air quality and cut greenhouse gas emissions in the transportation sector (the largest contributor of greenhouse gas emissions in Ontario).

New bio-based diesel requirements

The province has set minimums for the amount of bio-based diesel in the diesel fuel distributed, used, and/or sold in Ontario.

The content requirements will be phased-in over 3 years from 2014 to 2017. The first compliance period spans 21 months, beginning April 1, 2014 and ending December 31, 2015. Subsequent periods follow the calendar year. The requirements are as follows:

In 2014/15, 2% of the total volume of diesel fuel must be bio-based. The bio-based diesel component of this blend must have 30% lower greenhouse gas emissions than standard petroleum diesel.

In 2016, 3% of the total volume of diesel fuel must be bio-based. The bio-based diesel component of this blend must have 50% lower greenhouse gas emissions than standard petroleum diesel.

In 2017, 4% of the total volume of diesel fuel must be bio-based. The bio-based diesel component of this blend must have 70% lower greenhouse gas emissions than standard petroleum diesel.

Compliance reports

Under these new rules, suppliers must also complete and file compliance reports.

Reports are due by March 31 of the year following the compliance period. For example, you must file by March 31, 2017 for the 2016 compliance year.

Your report must confirm:

  • the amount of diesel and bio-based diesel in diesel fuel that you have placed in the Ontario market
  • the environmental performance specifications of the bio-based diesel.

You must keep a copy of your compliance reports and related records for 7 years. The document, Guide and Director’s Directions – Renewable Fuel Content Requirements for Petroleum Diesel Fuel, can help you complete your report.

How to submit a report

E-mail us to request the latest reporting form.

You can return the form via E-mail or mail it to:

Assistant Director, West Central Region
Ministry of the Environment and Climate Change
Ellen Fairclough Building
12th Floor, 119 King St W
Hamilton ON L8P 4Y7
Re: Ontario Regulation 97/14 (Greener Diesel)

Who must comply

Fuels suppliers who:

  • import diesel fuel into the province — and use or sell it in Ontario (wholesale or retail)
  • manufacture or blend diesel fuel — and use or sell it in Ontario (wholesale or retail)
  • acquire diesel fuel through an inter-refiner agreement — and use or sell it in Ontario (wholesale or retail)

Source law

You can find a complete set of provincial laws related to this activity in:

Quality standard requirements

You must ensure your blended fuel meets certain standards before it’s distributed – for use or sale – in the Ontario market.

  1. For low-level (0-5%) bio-based diesel blends, the latest standards are set out in:Canadian General Standards Board (CGSB) standard CAN/CGSB – 3.520-2011 – Automotive Diesel Fuel Containing Low Levels of Biodiesel (B1-B5)
  2. For mid-level (6-20%) bio-based diesel blends, standards are set out in:Canadian General Standards Board (CGSB) standard CAN/CGSB – 3.522-2011 – Diesel Fuel Containing Biodiesel (B6-B20)American Society for Testing and Materials (ASTM) standard ASTM – D7467-13 – Standard Specification for Diesel Fuel Oil, Biodiesel Blend (B6 to B20)
  3. For high-level (21-100%) bio-based diesel blends, standards are set out in:Canadian General Standards Board (CGSB) document CAN/CGSB – 3.524-2011 – Biodiesel (B100) for Blending in Middle Distillate FuelsAmerican Society for Testing and Materials (ASTM) document ASTM – D6751-12 – Standard Specification for Biodiesel Fuel Blend Stock B100 for Middle Distillate Fuels

Ontario Home Energy Rebate Program

This Program makes it easy and affordable for you to improve the energy efficiency of your home, lower your energy bills and reduce your greenhouse gas emissions. If you’re a qualified homeowner, you can take advantage of valuable incentives for participating in the Program.

Visit ohecip.ca for more information…

2016 Fall Forecast

forecast-fall-2016-001

Our final winter forecast will be released at 9:00 p.m. EDT on November 21. As we get closer to this date we will fine tune our forecast, but at this point we are expecting above normal snowfall for much of the Great Lakes region and southern Quebec. We also expect a snowy winter across Atlantic Canada, but not to the extent of what we saw during 2013-14 and 2014-15.

Near normal snowfall is expected in the Rockies and across the Canadian Prairies. Below normal snowfall is expected again along the South Coast of BC. An unanswered question as of yet is whether snow levels will be low enough in the coastal mountains to allow for a strong ski season despite the lack of snow at lower elevations. Read More