How to Navigate the Rising Cost of Oil

Podcast hosted by Gene Marks
Published: April 6, 2022 | The Hartford Small Biz Ahead

TRANSCRIPT

Gene (00:03):

Hey everybody. And welcome to the Small Biz Ahead podcast. My name is Gene Marks and thanks for joining me this week. Let’s talk about the high cost of oil. We all know about the war going on and other supply chain issues and other government regulations. There’s been a lot of restrictions on the production of oil around the world and the movement of oil. And because of that, that has really had a big impact on the price of oil. I don’t know if you know this or not, but like back at the beginning of the pandemic back in April of 2020, the price of a barrel of oil was 21 bucks. And as I’m talking, it’s about a hundred bucks a barrel. It’s gone up five times in just the past…

Gene (00:44):

Two years. You can tell it’s a very volatile commodity. Some people expect the price to continue to rise. I mean, to as high as $130 or $150 a barrel. Other people are expecting it to actually decrease to more normal levels, which is between about $50 to $80 a barrel. The bottom line is, is that we’re still spending, you know, if you’re running a small business and even in your personal life, you’re definitely spending significantly more to fill up your tank at the gas station. We know that, but look, it’s not just gas prices that are impacted by higher energy costs. I mean, according to The Department of Energy, petroleum based materials are included in hundreds of consumer products from Aspirin to toothbrushes even. So the rising cost of oil, isn’t just a thing on our gas tanks.

Gene (01:30):

It has a sweeping impact on so many products that we buy. Now, if you’re a small manufacturer, you’re probably already discovering that many of the products that you use are also directly or indirectly petroleum based and those costs are rapidly rising too. I mean, unfortunately as the supply chain issues persist, and if this war continues to rage in Ukraine, it’s likely this inflationary period, it’s gonna continue for the foreseeable future. So the question is, if you’re a small business owner, how can you get ahead of these increasing energy costs and how do you protect your bottom line? So let me give you some thoughts. Your first actions should be to target both travel and commuting. Like as gas prices rise, so will the cost to operate our vehicles. So to keep these costs under control, you should continue to encourage your employees who are able to work more hours remotely or from home in order to save on their commute. Airlines, they’re gonna be increasing their ticket prices soon to compensate for their higher fueled costs.

Gene (02:29):

So either book your travel now, or hold off on any unnecessary travel, at least for the time being and that may mean missing this year’s industry conference or holding more sales calls via zoom. I know that’s like ugh, it might be something we need to be doing to keep our energy costs down. Now, higher prices at the pump will also impact your cost to ship products as freight and logistics firms are surely gonna be increasing their fees. So be prepared to shop around for alternatives and consider sharing shipping costs with customers…[More]

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To listen to the full Small Biz Ahead podcast, visit: How to Navigate the Rising Cost of Oil