01/30/2014 21:20 EST | Updated 04/01/2014 05:59 EDT

Joe Oliver orders review of propane price jump, shortages

The federal government has ordered the National Energy Board and the Competition Bureau to review the sharp spike in propane prices and shortages in many regions that have hurt rural homeowners and businesses that rely on the fuel.

​Natural Resources Minister Joe Oliver said in question period Thursday he is concerned for families who rely on affordable propane to heat their homes and so will be asking the two organizations to "review propane market issues including high prices and scarcity."

Propane prices had remained stable from 2011 until late 2013, with the average retail prices in Canada falling between 69 and 75 cents a litre.

But a greater need from corn producers to use the fuel to dry their crop this fall and an earlier and harsher than expected winter has caused demand to spike, Oliver told reporters after question period.

Two months ago, the price was 74.2 cents a litre nationally. A month ago, it was 79.9 cents a litre. As of Tuesday, it had risen to 92 cents a litre.

Earlier this week, Ontario Energy Minister Bob Chiarelli urged Oliver to act and develop a national response to the issue.

But Oliver said it was within Ontario's power to regulate the distribution and pricing of propane.

"They can't complain about pricing but not regulate pricing," said Oliver. "They can't have it both ways."

Shortages concern rural residents

The price spike is now making Steve Koopman of Perth Road Village — a community a 23 kilometres north of Kingston — have second thoughts about his decision to switch to propane.

"I grew up in the suburbs with natural gas and I was used to consistent pricing and predictability. Propane looked like a good option, but unfortunately we really got hit hard this season," said Koopman.

In his area, he says the price has gone from 60 to 86 cents a litre. His January refill cost $800.

Shortages of propane have also been a problem in many regions, including eastern Ontario. Koopman said the shortages are also a greater cause of concern for him.

"Now I'm literally checking once a week to see what the level is at. I've gone and bought a 100-pound tank out of my own pocket making sure my family, my daughters don't freeze to death in a winter like [this one]," he said.