High Anxiety Over Energy Prices

Consumers and companies grapple with the discouraging prospect that fuel costs may stay high for a while

WASHINGTON — Terry Grandchamp’s Virginia home-remodeling business is booked through spring, and he’s planning to bump up his prices to help cover the high cost of gasoline and building materials. But when it comes to his own finances, there is no passing the buck, so Grandchamp is doing his best to conserve fuel at home and on the road.

Chemical maker Tomah3 Products of Wisconsin is somewhat less confident that customers will continue to absorb the soaring price of natural gas in 2006. That’s forced the company’s president, Steve King, to shrink his work force through attrition and hire a commodity broker to manage his fuel purchases.
At North Carolina-based Family Dollar Stores, the biggest worry these days is that the already tight budgets of low-income shoppers will be nearly busted by the expected surge in home-heating costs this winter. The company aims to stabilize by selling fewer discretionary goods and more essentials such as food and health products.

Such is life for consumers and companies grappling with the prospect that today’s high energy prices may stick around for a while. Crude-oil prices, although sharply below the 2005 peak of almost $71 a barrel in August, are expected to average more than $55 a barrel through the end of next year and potentially longer than that. That is more than two and a half times the $19.70 a barrel that crude-oil futures averaged during the 1990s, and about 60 percent more than the average price since 2000.

AP