With crude oil at record prices, recently breaking the $50 barrier, Pilkington has announced that its Building Products division is to introduce an energy surcharge on its glass products sold in Europe. The surcharge is as a result of increasing energy costs and will come into effect on 1 November 2004.

The manufacture of flat glass is an energy intensive industry and in common with many other UK-based companies, Pilkington has been affected by the increasing oil and gas prices brought about principally by continued tension in the Middle East and Russia and increasing global demand, particularly in China.

The energy surcharge will be implemented on each standard load of flat glass (usually between 18 & 30 tonnes) that Pilkington supplies to its European customers from 1 November 2004. Smaller deliveries will be surcharged in proportion.

To make the whole process fair and transparent, the surcharge will not be set by Pilkington but will be directly linked to the price of a barrel of Brent crude oil sold at London’s International Petroleum Exchange (IPE) for that quarter. As and when Brent Crude drops below the historical high end price of $30 per barrel, the surcharge will be removed.

Mark Lyons, Finance Director of Pilkington Building Products said: ‘We have sought to absorb rising oil and gas prices for as long as possible. However, this is not sustainable in the long term, and we have therefore devised this sliding surcharge as a fair and open system to pass on part of these escalating energy costs. We believe that the simple and open method we have adopted will offer every opportunity for our customers to do the same.’

Source

Glass Age