Pain at the pump is a more befitting description especially for pest control companies who operate a route-based business. Left unchecked, it could prove crippling and mean the shutting down of a lot of businesses.
LAGOS - According to the Business Insider, from data made available by Global Petrol Prices, on March 16, the national average for a gallon of gasoline was $1.48, a record high among states in the nation
The culprit has been the importation of adulterated crude in to the country in late February, hence concerted efforts to clean up the product leading to a scarcity of Premium Motor Spirit, thereby leading marketers to hoard the product and profiteer from the scarcity. The surge in global crude prices, a result of Russia’s invasion of Ukraine is also a major factor in this as Nigeria has refused to dedicate the resources to refine its own crude. A barrel of crude now sells for $102.6 according to the benchmark price Brent Crude. The last time oil price hit the $100 mark was in 2014.
Pain at the pump is even more acute for owners of route-based businesses like pest control companies. PCT caught up with several PCOs from various parts of the country to find out how they have been impacted and how they are adapting.
TO SURCHARGE OR NOT? Anytime gas prices dramatically spike the great debate among PCOs ignites about whether or not to add a fuel surcharge to their customers’ bills.
A notable owner of a PCO said his company has have never added a fuel charge in 31 years in business, “but all options are on the table at this time.”
Similarly, a concerned PCO president said, “We have considered it but are not moving forward at this time. But we have just implemented our largest price increase ever. Keep in mind we are mostly a commercial pest control business.”
On March 7, in a poll taken by PCT, it asked it’s LinkedIn followers, “In light of rising gas prices, are you considering adding a fuel surcharge to your customers’ bills?” and 64% answered “no” while 36% said “yes.”
Adding a surcharge increases your profit and recovers some of the cost of fuel; however, by doing so you risk upsetting your customers.
“Customers get irate when they see that line item,” said one (name withheld). “We did it in the past done it and it just did not work for us. It especially upset our [elderly customers].”
One of the problems with surcharges, PCOs cited, is that customers don’t understand that a surcharge will be removed or reduced when gas prices go down. If you do add a surcharge it’s important to send out a letter or e-mail to customers explaining the charge, PCOs said.
Most of the PCOs contacted by PCT answered this way when asked about what actions they would take in lieu of a surcharge, “Raise prices across the board,” he said.
RE-EXAMINE OPERATIONS. In addition to adding (or contemplating adding) a fuel surcharge, the spike in gas prices has caused PCOs to re-examine their operations in several key areas.
Anonymous says her company immediately saw the cost-savings benefits of using routing software and “We’re looking at it closer again. We’re not sending our guys from one community to the next. Let’s get all our work done in one community and then move on so that we are not backtracking and wasting fuel.”
Similarly, some are making use of software’s routing optimization tool, “We may just try to route a little tighter.”
Culled from pctonline.com
