Gas Beyond $4.00. Impact on Your Business?

I was returning from a meeting with a client this morning and needed to put gas in the rental before the return.  While gas has been creeping up, today was the first time I paid $4.00 per gallon (and yes, I know that there are 5 states that are averaging over $4.00 for regular unleaded).


As we know from the last couple of times that there were gas spikes, typically distributors start to think of how they can reduce costs, shift costs or increase revenues (margins, fees) to minimize the incremental expense, especially with the concurrent erosion in margin over the years (and other increasing operational costs).


This time, while we’ve heard some comments, there haven’t been many nor are we hearing of many distributor surcharges, service revisions, minimum orders requirements, etc.  Is it that we’ve become used to the increases, the pain isn’t enough, you don’t think anything can be done because you don’t think your competitor will make a change, or we feel this is just the “cost of doing business”?

In 2008 and late 2005 we conducted distributor surveys to ascertain how distributors are responding to soaring fuel costs (click here for some of our 2005 findings).  Should we do it again?

What are you doing with $4.00 unleaded regular gas (and expected to go higher for the summer) and more for diesel?  Will this eventually change an industry business model? What happens if we see $5.00? $6.00? Are manufacturer minimums increasing? Are your’s?