Does lower fuel mean lower rates

[deere755]

Well in our area as in most diesel and gas are lower then a year ago. Last fall I bought off road diesel for $3.56 and this spring they filled my tank for $1.50. Gas is around $2.00 here.
We have been putting some bids together for wildlife plots and I am trying to decide whether to lower them from last year as fuel has dropped or to just be like the rest of the country and pocket the profit.I am guessing my costs would be about $2 to $3 less per hour this year and who knows what fuel will do in the next few months.

Are any of you that are in business for yourself lowering your rates or charging the same as last year?

One thing that keeps crossing my mind is everything else has went up. Our electric rates went up 35% this year, as did our health insurance etc. So why not leave the rates alone.

 

[Ductape]

One thing that keeps crossing my mind is everything else has went up. Our electric rates went up 35% this year, as did our health insurance etc. So why not leave the rates alone.

I'd say you've hit the nail on the head !

 

[deere755]

Thanks for the reply. I was meaning to post this in owning and operating not attachments. That is what happens when you get interupted.

 

[rdln]

well....My neighbor quoted me $7000 to move some onsite fill last spring, if He were to requote it, I would expect it would about $1000 lower but excavators, dozeers and dumptrucks arent as economical to run as cuts or utility tractor (dont know what you are using plus there is no seed or fertilizer being used in my situation. Point is I would say to stay put in rates in preperation for higher taxes and inflation that is coming.

 

[JoeinTX]

Being a consumer, I've had expectations (hopes) that some things closely tied to the price of fuel will be costing less this year than last. It is reasonable.

However, what Ductape and rdln say is true.........practically everything else has gone up in price over the last year so why not your rates as well?



I dunno. Maybe, in a good faith move, you rollback prices for the long term repeat customers but maintain the new prices for all new and future customers....??? Sort of like "grandfathering" costs and terms. I know I would appreciate that as a buyer and it would make an impression upon me.

 

[CurlyDave]

...I dunno. Maybe, in a good faith move, you rollback prices for the long term repeat customers but maintain the new prices for all new and future customers....??? Sort of like "grandfathering" costs and terms. I know I would appreciate that as a buyer and it would make an impression upon me.

You have to be very careful with that. If your customers don't talk to each other, all you need is a very good memory. But different prices for different people can cause a huge problem in some situations.

We own some apartments in town. Before we moved to the country, we lived in a different state and had a property management company run them for us, I retired and took over management about a year ago.

The first thing I realized was that the management company had left me a mess -- the units were all rented for different prices, the ones with higher rents were resentful, but afraid to ask for a reduction, the lower ones were fearful of an increase, and no one liked it. Took me a year of small adjustments, and about 25% turnover to get it to the point where they are all the same. Everyone now feels like they are getting a square deal. They don't necessarily like the deal, but they can see it is fair to everyone.

 

[AKfish]

Costs for nearly all aspects of living have been moving upward for the past 2 years wth the escalation in energy costs... Duh..

The local electric utility just announced that they are rolling back the rate increase that went into effect last year. 80% of the cost of producing electricity in this area is tied to the price of natural gas.

If natural gas prices remain low; I would expect that the gas utility company will also roll back some percentage of the 60% rate increase that has occurred here locally in the past 2 years as well. If they don't - you can take your dog to Washington - that a couple hundred thousand customers are gonna come down on them like a very irate neighbor that's got alot of dog **** in his yard and doesn't own a dog!!

Point being - be fair - talk straight and do what's right. Maintain the profit level that you've had the past couple of year's and calculate your prices based upon that. Folk's respect that...

AKfish

 

[lawn_king]

We raised rates 5% this season, this is far less than we actually needed to maintain our profit margin?

 

[Farmwithjunk]

A lot was made about last summers high fuel prices. Unless you're running equipment that burns several gallons per hour, hourly fuel cost is relatively moderate compared to other expenses. I'd expect the "fuel surcharge" that was tagged on to so many bills to disappear, but overall, operating expenses aren't any lower this year. My insurance went up. Equipment cost went up. Parts prices never stopped climbing.

If prices hold steady all summer (which I don't expect to happen) we can expect our yearly fuel bills to be about half what they were. Spread over the total hours my equipment runs, that'll amount to approximately 4% reduction in operating cost. I gave my help a 3% pay increase. That ate up the 4% savings in fuel cost and a whole lot more. Don't expect my prices to drop any time soon.

 

[LoneCowboy]

I ate almost all of last year's fuel increases. Didn't change my rates, because I felt (and was right) it was temporary.
I didn't add fuel surcharges because I think it's a scam. (although I noticed they got added to my bills)
So, now that prices have dropped, they didn't come down either, they stayed right there.

Total overall my fuel bill was less than 7% of my total gross. That's been pretty constant over the past few years. Registration taxes were 10% and insurance was 8% last year. None of those ever go down, I don't add insurance surcharges. It's a cost of doing business.

But that's' just me, I do business like I want people to do business with me.