Lower fuel prices keeping costs in check

December 28, 2015 -  By

gas_pricesLower fuel prices help companies keep costs under control. 

Most is quiet on the expenses front for landscape professionals. Although industry members expect an overall operating cost increase of 11 percent—on par with what they reported for last year—they seem to be at ease thanks to fuel price relief.

“I bought gas today for $1.95,” says Steve Biernacki, general manager of WaterQuest Landscaping in Albuquerque, N.M. “It makes a big difference.”

U.S. regular gasoline retail prices declined to an average of $2.29 per gallon in October, down 31 cents from the third quarter average. The U.S. Energy Information Administration (EIA) expects monthly average gasoline prices to continue declining. EIA projects regular gasoline retail prices to average $2.33 per gallon in 2016. The diesel fuel retail price, which averaged $3.83 per gallon in 2014, is projected to average $2.72 per gallon for 2015 and $2.70 per gallon in 2016.

operating_costsOther costs have increased somewhat, such as concrete, but nothing is too out of the ordinary, Biernacki says. “I don’t really see anything that has gone up significantly,” he says.

At Joyce Landscaping in Marstons Mills, Mass., “expenses are up across the board”—except fuel. “If you look at our profit and loss statement, the one thing that’s been consistently cheaper has been gas,” says President Chris Joyce. In fact, the $11.5 million company is projecting a $60,000 fuel savings from 2014 to 2015.

Health insurance is up 3 percent for Joyce after changing carriers, liability is up due to growth, as is workers’ comp.

“The one that I’m most concerned about is the future of health insurance,” he says, noting the company has gone to a high deductible plan and is looking at self-insurance. “It’s a challenge for our employees; it’s a challenge for our country right now.”

photo: ©istock.com/rzelich

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