What problems does propane gas, which covers x20 larger areas than city gas and 40% citizen usage, have?
Annual Gas Savings Decrease by 35% Year on Year with “enepi” Usage?! A life saver for Tight Household Budgets

We are pleased to introduce “enepi”, a propane gas company information and price comparison service operated by ZIGExN Co., Ltd. (Headquarters: Minato-ku, Tokyo, Representative Directors, Operating Officer, and CEO: Joe Hirao, Tokyo Stock Exchange Prime: 3679, hereinafter referred to as ZIGExN). This service provides insights into the propane gas industry, including pricing trends and industry challenges, with the inclusion of enepi’s unique research data.

■Propane gas, lagging behind in promoting and understanding of the current situation and industry challenges.

Due to the recent rise in prices driven by global economic conditions and the accelerated depreciation of the yen, utility costs have significantly surged. In the consumer price index for the fiscal year 2022, while the overall index saw a 3.2% increase compared to the previous year, the category of “Water and Energy” witnessed a substantial 17.3% rise*1. Initially, the government’s response to alleviate the burden of energy prices targeted only electricity and city gas. However, in response to persistent demands, propane gas was included as well with a slight delay.

Considering the limited attention it receives in comparison to electricity and city gas, and the fact that it was initially excluded from relief measures despite existing needs, we will introduce the current situation of propane gas, taking into account data from “enepi” and delve into aspects such as pricing trends and industry challenges.
*1 Ministry of Internal Affairs and Communications: Consumer Price Index Based on 2020 Standards (As of April 21, 2023)

＜The number of propane gas users and supply areas: An energy source that primarily supports the lives of the nation, with a focus on rural areas.＞

Propane gas is one of the essential energy sources that approximately 40% of the nation, equivalent to 22 million households, relies on for daily life. Unlike city gas, which covers only about 6% of the country’s land area, propane gas provides 100% coverage, making it a distinctive feature with a high utilization rate in rural areas.

Source: Ministry of Economy, Trade and Industry, “4th Liquefied Petroleum Gas Distribution Working Group Secretariat Submission Material – Trends in Price Transparency and Transaction Fairness (March 2, 2023).”

＜Propane gas price trends: Periods when the price increases exceeded those of city gas, leading to a significant rise in costs, putting pressure on household budgets.＞

In terms of energy price relief measures, propane gas was initially excluded due to the perception that it was relatively less affected by price hikes. However, when we examine the actual situation using user data from “enepi”, it becomes evident that propane gas, like electricity and city gas, experiences annual price increases. We calculated the trend in monthly average billing amounts based on meter reading data provided by “enepi” users. In December 2022, while city gas prices increased by approximately 2,000 yen*2 from the previous month, propane gas marked an even higher increase of about 3,000 yen. Over the past year until April 2023, propane gas billing amounts have seen an average increase of 20% compared to the previous year, indicating a significant burden on household budgets.

Source: Research conducted by “enepi”
*2 Statistics Bureau of the Ministry of Internal Affairs and Communications: Retail Price Statistics Survey (As of April 25, 2023)

However, when we focus on the propane gas import price index (CP), which serves as an indicator for propane gas companies to adjust pricing plans, it shows that the peak was reached from the end of 2021 to around the summer of 2022, and in 2023, it has been trending lower than the previous year. Despite the fact that billing amounts have been consistently rising every year, it becomes apparent that there are factors contributing to these price increases beyond the cost of procurement.

Source: GYXIS CORPORATION “CP Trend Information”

＜Challenges in the propane gas industry: Opaque pricing structures and intensified competition driven by excessive sales activities.”＞

In the propane gas industry, opaque pricing has been a longstanding issue. This stems from the practice where propane gas companies install home appliances like water heaters and air conditioners for free to acquire customers, and then add the equipment costs to the monthly gas bills. Since there is no obligation to explain the breakdown of these charges, it has been challenging for users to avoid such risks.

Furthermore, in recent years, major gas companies have been intensifying their competition by investing in sales activities to meet the high demands of homeowners. To address these practices, the Ministry of Economy, Trade and Industry decided to revise the pricing system in March of this year.

Since its inception in 2016, “enepi” has been committed to enhancing price transparency. Through its unique system, users can easily compare and consider propane gas prices, thereby fostering a healthy competitive environment.

Source: Research conducted by “enepi”

The graph above illustrates the trend in annual estimated gas cost savings based on pricing plans from propane gas companies affiliated with “enepi”. These estimates are determined by comparing the annual gas billing amounts of customers who inquired with “enepi” to the annual gas billing amounts that would result from switching to the pricing plans of affiliated companies. The estimated cost savings have been increasing year by year, with an average of 35% higher compared to the previous year in the most recent one-year period ending in April 2023. As of April 2023, it is expected that customers can achieve cost savings of approximately ¥43,000 per year.

While there are approximately 1,300 city gas companies nationwide, with the top 10 companies having a market share of over 50% in their respective regions and being subject to regulated pricing set by the Ministry of Economy, Trade and Industry, propane gas providers number around 16,000 companies, creating a larger market. Due to the freedom to set their own prices, propane gas companies tend to have significant price differences compared to city gas providers. As the reform of propane gas pricing systems continues to spread in the future, services like “enepi”, which offer price comparison and analysis, are expected to see a growing demand.

■Compare Propane Gas Company Pricing Plans at Once! “enepi” Promotes Transparency in the Propane Gas Industry.

“enepi” is a propane gas company information and price comparison service that employs its unique pricing comparison system to promote transparency in the propane gas industry. It allows users to easily search and compare gas prices, which can be challenging to understand due to market variations and differing rates based on location. Furthermore, there are no costs involved, from requesting a quote to switching gas companies.

Furthermore, the affiliated gas companies are carefully selected through a screening process, ensuring that only reputable gas companies are part of the network. When switching between old and new gas companies, “enepi” handles the coordination, providing users with peace of mind. In addition to its pricing simulation feature, “enepi” also serves as an information hub for all things related to propane gas, including fundamental knowledge and money-saving tips that can benefit your lifestyle. It’s a service that helps you find the most cost-effective gas company that suits your needs.

“enepi” will continue to share various energy-related information that can be helpful in everyday life, striving for better matching between users and gas companies.

■About enepi  

“enepi” is a propane gas company information and price comparison service with its unique pricing comparison system. It allows users to easily search and compare gas prices, which can be challenging to understand due to market variations and differing rates based on location. In addtion, there are no costs involved, from requesting a quote to switching gas companies.     
Furthermore, the affiliated gas companies are carefully selected through a screening process, ensuring that only reputable gas companies are part of the network. When switching between old and new gas companies, “enepi” handles the coordination, providing users with peace of mind. In addition to its pricing simulation feature, “enepi” also serves as an information hub for all things related to propane gas, including fundamental knowledge and money-saving tips that can benefit your lifestyle. It’s a service that helps you find the most cost-effective gas company that suits your needs.
URL: https://enepi.jp/?pr=press