PPG Isues Auto Glass Fuel Surcharge Letter

PPG Industries sent out a letter yesterday announcing that it is going to start implementing a fuel surcharge effective October 13. The text of the letter follows:

Lisa M. Detwiler
Director Business Development
September 19, 2005

To Our PPG AutoGlass Customers:

In the last year, weekly average gas prices have risen by 60%. PPG Auto Glass has significantly reduced operating costs to offset fuel increases and other inflationary items by transitioning all locations to scheduled deliveries. With the recent increases in already elevated gas prices, effective October 13, PPG Auto Glass is implementing a fuel surcharge delivery fee. The fee will be based on the Department of Energy's reported average gas prices which can be accessed through the following internet link. http://www.eia.doe.gov/oil_gas/petroleum/data_publications/wrgp/mogas_home_page.html

At the end of each month, we will review the average regular grade gas prices for the preceding month and make adjustments to the fee based on the cost per gallon. The table below illustrates how the surcharge will be applied, beginning with a $1.00 fuel surcharge delivery fee at $2.00/gallon and increasing based on the ranges identified. The surcharge will increase in the same increments should fuel prices rise above $4.00/gallon. There will be no delivery surcharge applied when the average regular grade gas price falls below $2.00/gallon.

Month-end Cost/Gal
Fuel Surcharge
Per Delivery
$2.00 $2.24 $1.00
$2.25 $2.49 $1.50
$2.50 $2.74 $2.00
$2.75 $2.99 $2.50
$3.00 $3.24 $3.00
$3.25 $3.49 $3.50
$3.50 $3.74 $4.00
$3.75 $4.00 $4.50

We recognize that all industry participants are dealing with rising costs. We need to identify ways to offset increasing operating costs in our industry and believe this surcharge equitably allocates such costs.

Thank you for your understanding and for your continued support.


Lisa M. Detwiler

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