STRATEGY
What the 2026 Propane Survey Says About Where the Industry Is Headed
5 key takeaways propane distributors should stay on top of
By Marty Kirshner
Charts courtesy of Gray, Gray & Gray – A Frazier & Deeter Company
Gray, Gray & Gray’s annual Propane Industry Survey always provides a wealth of information on operations, finances and how dealers manage their businesses. But you have to read between the lines a bit to spot the emerging trends that will shape our industry in the years ahead. Let’s take a deeper dive into the results from the most recent survey.
Propane companies average gallons delivered per stop, 2024-2026.
Rapid Incorporation of AI
The single number that jumps off the page in our 2026 National Propane Industry Survey is 65. That’s the percentage of propane dealers who now say they’ve incorporated artificial intelligence into their operations, up from just 19% a year earlier. A 46-point swing in 12 months is not a gradual shift. It’s a whole industry deciding — seemingly all at once — that AI has stopped being a conference-panel topic and has become a tool for route optimization, tank-monitoring analytics and customer service automation. Dealers are using it primarily for run-out prevention (32%) and dispatch planning (27%), which suggests this isn’t about chatbots for their own sake. It’s about squeezing more efficiency out of a delivery network that has gotten steadily leaner over the past several years.
That leanness shows up in another number worth examining: According to data from Angus Energy, gallons delivered per stop climbed from 160 in 2023 to 182 in 2024, then 206 in 2025, and now 218 in 2026. Over the past four years of our survey, dealers have talked about making fewer, larger deliveries and optimizing fleet routing, and every year the data backs it up. This is the quiet story underneath the AI headline. Long before software vendors started pitching predictive analytics, propane marketers were already engineering their routes for maximum gallons per stop, and the technology adoption of the past year looks less like a leap and more like dealers finally getting tools that match a strategy they’d already committed to.
Resilient Margins Among Uncertainty
Margins tell a slightly different story this year. Residential propane margins rose steadily for three straight years, from $1.30 a gallon in 2023 to $1.42 in 2024 to $1.50 in 2025, before slipping just slightly to $1.48 in 2026. Commercial margins tell a similar story, holding flat at $0.87 through 2023 and 2024, then jumping to $1.01 in 2025 before easing back to $0.98 in 2026. This year points to global disruption in product supply late in the season — a modest pullback after three years of gains that looks less like trouble and more like an industry absorbing a real shock without losing ground. Only 1% of dealers reported declining profitability, and 66% grew their per-gallon margin. That’s a resilient result for a year with genuine supply uncertainty.
Shifting Workforce Strategies
Labor remains the one constant across all four years of this survey, though the shape of the problem is shifting. In 2023, 61% of dealers reported one to five vacant positions. That figure has eased each year since, down to 47% in 2026, with 28% now reporting no vacancies at all. Recruiting and retention still top the list of challenges dealers report, at 57%, but the industry’s playbook for holding onto people has matured. Wage increases remain the most common retention tool, and 77% of dealers now say they’re cross-training employees specifically to keep them working year-round instead of laying them off in the offseason. The problem hasn’t disappeared, but dealers have gotten better at managing it.
Newly enacted workforce retention strategies, 2025-2026
Converting to Electric Heat Pumps — & Back Again
The trend that deserves more attention than it’s getting is what’s happening on the demand side. The share of dealers who lost customers to heat pump conversions jumped from 11% in 2025 to 18% in 2026, one of the largest single-year moves in the customer-loss data over the past four years. But the same survey asked a new question this year about what happened to those converts, and the answers are worth reading closely: 37% reported inadequate heating performance, 36% reported higher energy bills and 22% of converted customers reverted to legacy systems. That’s not an argument for complacency. It’s a specific, current talking point for any dealer fielding a “why not just switch to electric” conversation with a customer this fall.
Increased Consolidation
Finally, watch the ownership data. The share of dealers considering selling their business more than doubled this year, from 9% in 2025 to 19% in 2026, while acquisition appetite climbed back to 49%, up from 39% in 2025 and roughly back to its 2023 level. Combined with succession planning holding steady at around half of respondents, this suggests an industry entering an even more active consolidation phase. Meanwhile, 40% of dealers say they spend less than 2% of gross margin on marketing, even as price competition remains the top reason customers leave. In a market where bigger players are shopping for acquisitions and smaller ones are shopping for exits, underinvesting in the customer relationships that determine which category you fall into seems like the riskiest number in the whole survey.
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