# How do propane pre-buy programs work? > A propane pre-buy is a contract where you pay a dealer up front for a set number of gallons at a price fixed when you sign, then take delivery of those gallons through the heating season. In EIA's weekly survey, the US residential price averaged more in January and February than in the first October week in each of the five seasons from 2021-22 through 2025-26. _Updated Oct 22, 2026._ A propane pre-buy is a contract where you pay a dealer up front for a set number of gallons at a price fixed on the day you sign, then take delivery of those gallons through the heating season. You trade the going winter price for the price at signing, and you pay for the fuel months before you burn it. Pre-buy is one of four contract types a dealer may offer for the winter. The others fix or cap the price without the upfront payment, or spread the bill evenly over the months. Connecticut writes each type into its heating fuel law (Connecticut General Statutes, chapter 296a), so its definitions are a clear public reference. Contracts in other states use the same names, but the terms are each dealer's own. ## The four contract types {#contract-types} - **Pre-buy (prepay).** Connecticut's statute calls it a prepaid guaranteed price plan, "also known as 'buy ahead', 'prebuy', 'prebought'": heating fuel at a guaranteed price, paid for in advance of delivery. - **Fixed price.** The same guaranteed price, paid for each delivery as it arrives instead of up front. The statute lists "fixed price" and "lock in" among the names for a guaranteed price plan that is not paid in advance. - **Price cap.** You pay the going price, but never more than a ceiling per gallon written into the contract. Connecticut requires a capped plan to state how and when the price will drop below the cap. - **Budget plan.** Not a price contract at all: the expected season's bill is split into equal installments. In Connecticut a budget plan means at least three payments over at least 120 days, with the first payment no more than half the balance. It can sit on top of any of the other three, or on the going price. Outside all four is the going price itself, what a dealer charges a customer who calls for a delivery (will-call) or takes automatic delivery at the posted price. That is the price the weekly survey behind this site measures. ## What a pre-buy shifts {#what-shifts} A pre-buy moves two risks in opposite directions. Price risk moves to the dealer: if the going price rises over the winter, the dealer still owes the contracted gallons at the contracted price, and if it falls, the customer still pays the contracted price. Cash and delivery risk move to the customer: the money is paid before the fuel arrives, so the customer depends on the dealer to stay in business and deliver. Connecticut's law is built around that second risk. Within five business days of selling a pre-buy, a dealer there must either secure fixed-price supply (its own inventory, futures, forwards or supply contracts) covering at least 80 percent of the gallons it has pre-sold, or post a surety bond worth at least half of the money customers have prepaid. A contract may not run longer than 18 months or renew automatically, and the contract price of any gallons not delivered by the end date is refunded within 30 days unless both sides agree otherwise. Dealers may not offer prepaid plans in the state from November 1 through March 31. The supply rule shows how a pre-buy price gets made. A dealer that sells a fixed winter price locks in supply for it at the time of the sale, so the contract price is built on the wholesale market in the month of signing, plus the dealer's delivery cost and margin, rather than on the winter's going price. ## What the seasonal record shows {#seasonal-record} EIA's weekly survey asks each dealer for its residential price on the survey Monday, before taxes and without discounts or premiums for small or large deliveries. That is the going price, not a contract price. No public survey publishes pre-buy prices, which differ from dealer to dealer. What the survey does show is the shape of the going price that a pre-buy is weighed against. [Chart: United States propane price](https://fill-line.com/region/us) ([data](https://fill-line.com/region/us.md) — chart image: https://fill-line.com/charts/region/us/chart.png) **US residential propane: first October week vs January-February, five heating seasons** | Heating season | First October survey | January-February average | Season high (week) | January-February minus first October | | --- | --- | --- | --- | --- | | 2021-22 | $2.590 (Oct 4) | $2.781 | $3.019 (Mar 14) | +19.1 cents | | 2022-23 | $2.661 (Oct 3) | $2.701 | $2.710 (Jan 30) | +4.0 cents | | 2023-24 | $2.379 (Oct 2) | $2.567 | $2.616 (Feb 19) | +18.8 cents | | 2024-25 | $2.404 (Oct 7) | $2.706 | $2.753 (Feb 24) | +30.2 cents | | 2025-26 | $2.417 (Oct 6) | $2.611 | $2.678 (Mar 23) | +19.4 cents | _Source: EIA State Heating Oil and Propane Program weekly survey, US residential price, dollars per gallon, as stored by The Fill Line (read Oct 22, 2026). The January-February average is the simple mean of that season's January and February survey weeks._ In each of those five seasons the January-February average ran above the first October reading, by 4.0 cents in 2022-23 and by as much as 30.2 cents in 2024-25. The size of the gap is what changes, and it does not simply follow the wholesale hub. In 2022-23 the Mont Belvieu spot price fell from an average of $1.075 a gallon in July through September 2022 to $0.835 in January and February 2023, and the residential price still rose 4.0 cents from its first October survey to its January-February average. In 2025-26 the hub averaged $0.690 in July through September 2025 and $0.618 in January and February 2026, and the residential price rose 19.4 cents over the same stretch. Retail propane follows the winter delivery season as much as the wholesale market, which [why propane prices rise in winter](/guides/why-propane-prices-rise-in-winter) explains. [Chart: Mont Belvieu propane spot price](https://fill-line.com/spot/mont-belvieu) ([data](https://fill-line.com/spot/mont-belvieu.md) — chart image: https://fill-line.com/charts/spot/mont-belvieu/chart.png) ## Worked example: 800 gallons in the 2024-25 season {#worked-example} Take a home that burns 800 gallons over a winter. At the US going price in EIA's first survey of the 2024-25 season, $2.404 on October 7, 2024, those 800 gallons came to $1,923.20. At the January-February 2025 average of $2.706, the same gallons came to $2,164.80, or $241.60 more. At the season's high, $2.753 in the week of February 24, 2025, they came to $2,202.40. EIA also surveyed prices monthly that summer: $2.369 on September 9, 2024, or $1,895.20 for the 800 gallons. The same arithmetic for 2022-23 gives a much smaller gap. At $2.661 on October 3, 2022, 800 gallons came to $2,128.80; at the January-February 2023 average of $2.701, they came to $2,160.80, a difference of $32.00. Those are going prices, so the example shows the range a pre-buy price gets measured against, not what any pre-buy cost. Whether a contract comes out ahead depends on its own price, any fee, and the going price in the weeks the gallons are actually delivered, and the last of those is unknown when the contract is signed. That uncertainty is what a pre-buy prices. Budget billing changes the timing of the payments, not the total. At the 2025-26 US season average of $2.553 a gallon, 800 gallons is $2,042.40; split across ten equal payments, that is $204.24 a month instead of delivery bills that land in the cold months. The latest US residential average is $2.730/gal in EIA's Oct 26, 2026 survey. The [tank refill cost calculator](/tools/tank-refill-cost) and the [winter propane cost estimator](/tools/winter-cost-estimator) run the same gallons-times-price arithmetic at any surveyed state's latest price, next to that state's past seasons. ## Questions to ask before signing {#questions} - **Price and gallons:** the contracted price per gallon, the number of gallons, and any minimum. - **Fees:** any fee for the program or the cap, delivery charges, and whether taxes are included. - **Unused gallons:** what happens to gallons not delivered by the end date. In Connecticut the contract price is refunded within 30 days unless both sides agree otherwise. - **Extra gallons:** what price applies once the contracted gallons run out. - **Security:** how the dealer backs the contract, with supply bought ahead or a bond. - **Payment:** whether paying by credit card changes the protection. Connecticut requires dealers to tell customers that the federal Fair Credit Billing Act may cover fuel that is paid for and not delivered. - **Delivery:** automatic or will-call, and what each costs. The Fill Line reports the survey numbers and explains how these contracts work. It does not forecast prices and never advises whether, or when, to pre-buy, lock or cap. The Fill Line is a free weekly read of the public propane numbers: the state price survey from October through March, and stocks, the Mont Belvieu spot and the weekly supply balance year round. One email a week on what moved. ## Related data + guides - [US residential and wholesale propane price](https://fill-line.com/region/us) - [Mont Belvieu propane spot price](https://fill-line.com/spot/mont-belvieu) - [Why propane prices rise in winter](https://fill-line.com/guides/why-propane-prices-rise-in-winter) - [How much propane does a home use?](https://fill-line.com/guides/how-much-propane-does-a-home-use) - [Propane tank refill cost calculator](https://fill-line.com/tools/tank-refill-cost) - [Winter propane cost estimator](https://fill-line.com/tools/winter-cost-estimator) - [Glossary](https://fill-line.com/glossary) ## Common questions ### What is a propane pre-buy? A contract where you pay a dealer in advance for a set number of gallons at a price fixed when you sign, then take delivery through the heating season. Connecticut's heating fuel law calls it a prepaid guaranteed price plan, also known as buy ahead, prebuy or prebought. ### Is pre-buying propane worth it? It depends on the contract's own price and fees and on the winter's going price, which is unknown at signing, so The Fill Line does not answer it for a reader. The record it can show: in EIA's weekly survey, the US residential price averaged more in January and February than in the first October week in each of the five seasons from 2021-22 through 2025-26, by 4.0 to 30.2 cents a gallon. No public survey publishes pre-buy prices themselves. ### What is the difference between a propane pre-buy and a fixed-price contract? Both lock the price per gallon. A pre-buy is paid up front for a set number of gallons; a fixed-price contract is paid delivery by delivery. Connecticut's law treats the first as a prepaid guaranteed price plan and the second as a guaranteed price plan. ### How does a propane price cap work? You pay the going price at each delivery, but never more than the ceiling per gallon written into the contract. Connecticut requires a capped plan's contract to state how and when the price will fall below the cap. ### How does a propane budget plan work? The expected season's bill is split into equal payments, so the cost lands evenly instead of in the cold months. It changes the timing, not the price. In Connecticut a budget plan means at least three payments over at least 120 days, with the first no more than half the balance. ### When can you sign a propane pre-buy? Each dealer sets its own sign-up window. In Connecticut, state law bars dealers from offering prepaid plans from November 1 through March 31. --- Canonical URL: https://fill-line.com/guides/propane-pre-buy-programs