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Gas Prices: How High, How Long?  June 22, 2006

Has the high price of gas affected you and your business? Let us know how you’re being impacted—and how you’re coping with the challenge of $3-a-gallon-plus gas.

The good news (not often reported) is that some experts see gas prices easing after 2010. That doesn’t take the sting out of high prices now, and over the next few years, however.

Landscape work is a great way to get outside and enjoy the freedom of running a small business. The downside, of course, is that the buck stops with you. Landscapers and other green-industry workers are feeling the pinch of high pump prices like few others in America.

The Evansville Courier & Press recently focused on several business owners in Indiana. The text below is adapted from the article.

A Daily Struggle

Each morning, James Daily maps out what seems like the most efficient route for his landscaping company. The extra planning takes a little more time, but it seems to have helped Daily, the owner of Daily Lawn and Landscape, cut down on gasoline usage.

“The prices have definitely made a difference in my routing and scheduling,” Daily said. “We don’t want any back-tracking, and we try to get everybody in one trip.”

While motorists are feeling the pinch as gasoline prices hover near $3 a gallon, another group is getting hit even harder: landscapers and lawn maintenance businesses.

Soaring gasoline prices have cut into what is usually a profitable season for them.

“It’s definitely affected how much money I’m making,” said Derrick Dillinger, owner of Ace Lawn Care in Evansville. “It sure isn’t easy. Gasoline is pretty much all of my cost.”

Passing on Costs

Dillinger, who is his company’s only employee, said he has been shelling out about $200 a week for gasoline to mow 30 lawns.

“That’s about three days worth of work, and I’m still paying that much for gas,” he said.

For Dillinger, Daily and other landscapers, the higher gasoline prices eventually will have to be passed on to customers.

“If prices keep going up, I’m looking at a surcharge,” Daily said, adding that most customers accept the reasons behind the extra cost.

“I used it last year, and didn’t have anybody complain at all,” Daily said.
“Most people are understanding,” Dillinger said of passing on the gas costs to customers. “When it went up 50 cents, there’s not much you can do.”

The Long-Term Outlook

London-based Standard Chartered Bank (SCB) expects oil prices to average around $40 a barrel by 2010.

“On the negative side, oil prices are unlikely to remain at the current high levels over the next five years,” SCB’s regional head of research Steven Brice said.

“While we only formally forecast oil prices out to 2007, we have assumed a gradual decline to this long-term average by 2010.”

The U.S. government’s Energy Information Administration sees a similar decline in price by 2010, but notes that forecast depends on “international political stability.”

Sources: Evansville Courier & Press (Evansville, Ind.), Gulf Times (Qatar)

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