Let’s start off by pointing out the fact that even though it may seem like propane gas suppliers usually set the prices arbitrarily on their own, a little digging will reveal that they have very little control over the prevailing prices in the market. The actual determination of propane prices is something beyond their direct control. All they do is transfer any changes in the costs that they incur directly to their customers. If their costs rise, then they will increase the propane prices and if their costs fall, then so will the prices of gas.
So,essentially the final propane prices in the market are determined by the costs incurred in providing that propane. The costs themselves are dictated, either directly or indirectly, by a number of various factors acting both independently and collectively. For instance, political instability in the areas where gas is extracted will almost always result in an increase in the costs of production and, by extension, an increase in the propane prices.