ACHRNEWS

High Gas Prices Pinch Contractors' Wallets

August 25, 2005
An online survey on The News' Web site (www.achrnews.com) asked HVACR contractors if this summer's high gasoline and diesel fuel prices were hurting the profitability of their businesses. An overwhelming 91 percent answered affirmatively.

Prices for gasoline and diesel fuel have reached record highs this summer, according to the American Automobile Association (AAA). The U.S. Department of Energy's (DOE's) Energy Information Administration (EIA) projects that gasoline and diesel fuel prices will show increases of about 35 cents and 55 cents, respectively, for the 2005 driving season (April through September) compared to 2004. This period coincides with HVACR contractors' peak selling and service season.

Asked what steps their companies are taking to ease rising fuel expenses, News survey respondents provided a range of answers. For example, John D. Ayres, Ayres Climate Control, Newtonville, N.J., and Robert Thompson, Thompson Heating & Cooling, Lynchburg, Va., said their firms are raising their rates. Stan Galoski, Frost Bite Heating & Air Conditioning, Powder Springs, Ga., and Dean West, Morris Mechanical, Charlotte, N.C., noted that their companies are using a fuel surcharge to offset the higher expense.

Charles Wells, Levy and Son Service, Dallas, wrote that his firm is restricting its service area. Robert Hoelzer Sr., Roberts Mechanical Corp., Bohemia, N.Y., indicated that his company is dispatching more efficiently. Ed Mullett, Mullett's Air Conditioning & Heating, Marrianna, Fla., said his business is making no unnecessary trips.

The long-term outlook for gasoline and diesel fuel does not appear to be significantly different. The EIA expects motor fuel prices to stay well above $2 per gallon through 2006.

Publication date: 08/29/2005