Posted: August 15, 2026
If you use propane for hot water, cooking, a fireplace or a generator, but not to heat your house, this is the charge most likely to surprise you.
A minimum use fee is an annual charge applied when a household doesn’t buy enough propane in a year to justify the cost of the tank the dealer owns and maintains. It’s sometimes called a lease fee, a minimum usage fee, or a low usage fee.
The reasoning is straightforward. A tank costs a dealer the same to buy, install, inspect, insure and eventually replace whether you burn 200 gallons a year or 900. Below some usage level, the margin on the fuel no longer covers that cost.
Nearly all of them recover the cost of serving low volume customers, but most do it by quoting a higher price per gallon rather than by charging a named fee.
This is the part most people never see. In our July 2026 survey of 16 Hudson Valley dealers, we asked each for a quote at whole house heating volume, 900 to 1,000 gallons a year, and again at water heating and cooking volume, 250 to 350 gallons a year.
Every dealer quoted the smaller household more. The median difference was $0.80 per gallon. The range ran from $0.51 to $2.15.
At the high end, a household using 300 gallons a year pays roughly $645 more per year than the same fuel would cost a large customer, with no fee appearing on the bill anywhere.
It depends entirely on the numbers, which is why the comparison has to be done on total annual cost rather than on whether a fee appears on the invoice.
For a household using 300 gallons a year:
| Approach | Annual cost of being a small customer |
|---|---|
| Dealer quoting $2.15 more per gallon | about $645 |
| Dealer quoting the median $0.80 more per gallon | about $240 |
| Kimlin minimum use fee, 250 or 330 gallon tank | $299.99 |
| Kimlin minimum use fee, 420 lb tank | $199.99 |
We’ll be straight about where that leaves us. Our named fee is somewhat above the market median and dramatically below the high end. What it is not is a hidden cost. You can read the number before you sign, ask us about it, and plan around it.
The question isn’t whether a company charges you for being a small customer. They all do. The question is whether you can see it.
Ask for the threshold in gallons, and ask for it in writing. Two questions:
Several companies publish that a minimum use fee exists without ever publishing the number that triggers it. If you can’t get a gallon figure, you have no way to know whether you’ll be charged until the bill arrives.
Our minimum use fee applies only if your annual usage falls below your tank’s capacity, one full turn of the tank per year. A 500 gallon tank means 500 gallons a year.
We publish the threshold and we publish the fee, both at our schedule of fees. The fee bills automatically, but if your circumstances changed, call us and we’ll review it. We would rather fix it than argue about it.
We’d encourage you to ask every dealer you call for the same two numbers, in gallons and in dollars, in writing. You may find we’re one of very few who will put them on paper, and that the companies with no minimum use fee at all are charging you for it somewhere else.
In July 2026, Kimlin Energy contacted 16 propane and heating oil dealers serving Ulster, Dutchess and Orange counties as a residential customer, requesting quotes at two usage levels. Figures reflect quotes given during that period and change with the market. Ranges are reported in aggregate; individual dealers are not named. Kimlin’s own figures are included in the ranges.