Some Superior Propane customers are expressing irritation with the company following an increase in tank rental rates.
In Mathieu Savoie’s case, his annual bill jumped from $199 to $300. The Moncton, NB, man received written notification from Superior Propane last August.
“The 50 percent increase in the rental price seemed a little usurious to me. So it was a shock, a surprise,” Savoie said. “It definitely made me a little angry.”
The price increase is only for the rental of the equipment. When the tank is filled, the cost of propane is a separate expense for customers.
In a written notice to affected customers, Superior Propane stated that “due to infrequent deliveries of propane, we need to increase the equipment rental rate to ensure equity and sustainability.”
“While we recognize that individual propane usage patterns vary, our pricing model is intended to reflect the overall costs associated with serving our diverse customer base,” said the notice from the Ontario-based company, which distributes propane in all of Canada.
Patricia Jodrie of Berwick, NS, received the same letter; only that his bill increased by 88 percent.
“The notice I got was very cold, you know, it’s a shame for you because you didn’t use our propane enough. And so, we’re going to raise the price, we’re going to double it. That’s the feeling I got,” Jodrie said .
CBC News was contacted by four additional customers in Nova Scotia, Newfoundland and British Columbia who received the same letter and were also upset.
Jodrie said he purchased a propane fireplace as a backup heating system for winter storms and has only used it occasionally. But after receiving the notice from Superior, she’s eager to get her bill again, so she now lights the fireplace every once in a while, just in case.
“As an older person you don’t need those worries,” he said.
Both Jodrie and Savoie have since changed propane companies. Superior did not charge them to cancel their contract or remove the equipment.
Company response
In a written statement to CBC News, Superior said its rental rates are adjusted when “tanks are left idle or minimally used for extended periods of time.”
“These changes help offset the increasing costs associated with equipment maintenance and inspection, while meeting regulations and reinforcing our commitment to safety,” the statement said.
Superior also said the cost of purchasing new propane storage has “increased significantly in recent years.”
“Tank maintenance and inspection expenses, which occur when tanks are full and are required by regulatory authorities, have also increased due to higher parts and labor prices across the industry,” it reads. in the statement.
But not everyone accepts the company’s reasoning.
Geoff White, executive director of the Public Interest Advocacy Center, a national nonprofit, said the price jump is “troubling.”
“It seems arbitrary and shocking, and it hasn’t been done in a piecemeal way that’s tied to some rational business case,” he said. “That’s why I would speculate that this is really a move to satisfy shareholders at the expense of small users.”
Superior, a publicly traded company, acquired Certarus, a formerly privately held company based in Calgary, in 2023. The deal was valued at more than $1 billion at the time and was reviewed by the Competition Bureau.
“The argument for approving mergers is that there will be gains and efficiencies. And those gains, while they may offset losses in competitive markets, are supposed to be good for the economy,” White said.
“However, I really wonder if that really happened because if prices go up and smaller users are punished, the efficiency excuse is irrelevant.”
White added that customers in rural and remote areas often use propane.
What’s in the fine print?
On its website, Superior promotes why potential customers should rent tanks instead of purchasing them outright, citing that ownership often comes with additional expenses.
“However, renting a propane tank with Superior Propane provides customers with comprehensive propane service for both residential and commercial use,” the website states. “By doing so, we take on the responsibilities, allowing you to have a high-quality propane tank at a competitive price, plus peace of mind.”
In the fine print of Superior’s overall retail agreement, it states that customers “must purchase a minimum of 200 liters of product per term year, or Superior may charge a booking fee.”
Both Jodrie and Savoie did not monitor their propane use, but confirmed to CBC News that they were not frequent users.
Hadi Eslami, an associate professor of marketing at Saint Mary’s University in Halifax, said the agreement does not specify how much the booking fee would be or the fact that it could become permanent.
“In a perfect world, everything will be transparent and everyone will know what to expect next in terms of rate increases and everything, but this contract is very incomplete,” Eslami said.
In his opinion, customers have every right to be surprised by an increase of 50 percent or more. Eslami said the company did not clearly warn customers that such a drastic increase could occur.
“There is room for improvement in the terms and clauses of the contract so that everything is clear for consumers,” Eslami said.
More than two months after canceling his contract with Superior, the rental tank still sits in Savoie’s yard.
In its statement, Superior said it “offers a no-cost pickup service and we reuse these tanks for customers who rely on propane for their essential needs.”
But Savoie said the lack of urgency to get the equipment back only makes him question the price increase even more.
“It certainly falls flat, especially in a time when everything has increased in cost, a 50 percent increase was completely out of the question, not something you would expect at all,” Savoie said.
