Skyrocketing rental fees 'shock' some Superior Propane customers

Some customers of Superior Propane are expressing their irritation with the company following a hike in tank rental fees.

In Mathieu Savoie's case, his annual bill jumped to $300 from $199. The Moncton, N.B., man received a written notice from Superior Propane last August.

"The 50 per cent increase in a rental fee seemed a bit usurious to me. So a bit of a shock, bit of a surprise," said Savoie. "It definitely got me a little bit angry."

The price jump is solely for the equipment rental. 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 propane deliveries, we need to increase the equipment rental rate to ensure fairness and sustainability." 

"While we recognize that individual propane usage patterns vary, our pricing model aims to reflect the overall costs associated with serving our diverse customer base," said the notice from the Ontario-based company, which distributes propane across Canada.

Patricia Jodrie of Berwick, N.S., received the same letter — only her bill jumped 88 per cent. 

"The notice that I got was very cold, you know, like shame on you because you didn't use our propane enough. And because of that, we're going to raise the price, we're going to double it. That's the feeling I had," said Jodrie.

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 she bought 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 anxious about having her bill again, which is why she now turns on her fireplace every so often, just in case.

"As a senior you don't need those worries," she said.

Both Jodrie and Savoie have since switched propane companies. Superior did not charge them for cancelling their contract or removing equipment.

Company response

In a written statement to CBC News, Superior said its rental fees are adjusted when "tanks become inactive or are used minimally for extended periods of time."

"These changes help offset the rising costs associated with maintaining and inspecting equipment, while complying with regulations and reinforcing our commitment to safety," the statement said.

Superior also said the cost to purchase new propane storage has "increased significantly in recent years."

"The expenses for tank maintenance and inspections, which occur when tanks are filled and are required by regulatory authorities, have also risen due to higher industry-wide prices for parts and labour," the statement said.

But not everyone accepts the company's rationale.

Geoff White, executive director of the Public Interest Advocacy Centre, a national non-profit, said the price jump is "troubling."

"It seems arbitrary and shocking, and it hasn't been done in a gradual manner that is sort of linked to any rational business case," he said. "That's why I would speculate this is a move really to satisfy shareholders on the backs of the small users."

Superior, a publicly traded company, acquired Calgary-based Certarus, a formerly private company, 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 the mergers is that there will be gains and efficiency. And those gains, even though they might offset losses in the competitive markets, are supposed to be good for the economy," said White.

"I really question though if that's really played out because if prices are going up and smaller users are being punished, it sort of makes the efficiencies excuse irrelevant."

White added that propane is typically used by customers in rural and remote areas. 

What's in the fine print

On its website, Superior promotes why prospective customers should rent tanks rather than buy them outright, citing ownership often comes with extra expenses.

"However, a propane tank rental with Superior Propane provides customers with comprehensive propane service for both residential and commercial use," the website states. "In doing so, we take on the responsibilities, enabling you to have a high-quality propane tank at a competitive price, along with peace of mind."

In the fine print of Superior's general retail agreement, it states that customers "must purchase a minimum of 200 litres of product per year of the term, or Superior may charge a standby fee."

Both Jodrie and Savoie didn't monitor their propane usage, but confirmed to CBC News that they weren't frequent users.

Hadi Eslami, an associate professor of marketing at Saint Mary's University in Halifax, said the agreement doesn't specify how much a standby fee would be or the fact it could become permanent.

"In a perfect world, everything is going to be transparent and everyone knows what to expect next in terms of, you know, fee increase and everything, but this contract is very incomplete," said Eslami.

He said in his opinion, customers have every right to be shocked by a 50 per cent increase or more. Eslami said the company did not clearly warn customers that such a drastic hike could happen.

"There is room for improvement in the terms and clause of the contract so everything is clear with the consumers," said Eslami.

More than two months after cancelling 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 repurpose these tanks for customers who rely on propane for essential needs."

But Savoie said the lack of urgency to retrieve the equipment only makes him question the price increase even more.

"It certainly falls flat, especially in a time where everything has been going up in cost, a 50 per cent increase was just completely out of left field, not something that you expect at all," said Savoie.