the larger kerosene dealers in the area,
and while there can be some minor
hassles it's definitely worth it because
obviously kerosene demands a bigger
margin. Of course I think the oil com-
panies are making all of that margin
now and not us because prices have
increased dramatically," he added, rue-
fully.
On the HVAC side the company
primarily concentrates on heating sys-
tems, though it can provide some AC
service to its customer base. "In the
summer there's always maintenance
to do around the building and on the
trucks, and there are a lot of indepen-
dent contractors in our area to com-
pete with for AC service," he said. "So
it's not a priority for us."
Klinger also noted that these con-
tractors provide them with referrals
which requires a very difficult balancing
act. "There is a fine line there and it's
a tough one to follow," he said. "The
larger companies out there would rather
install equipment than service it, so
while we're getting the worse end of the
deal, servicing and not installing, we are
also picking up fuel customers through
the process. So that works well for us."
He also noted the need for educated,
certified technicians to service equip-
ment for both products, and especially
propane with some of the potential lia-
bility issues. "Fuel oil is very flexible,"
he said. "If you have [backups] you can
always shop out your work to a quali-
fied installer. You definitely have that
benefit. With propane you really have
to keep it in-house because the liability
exposure is pretty dramatic if you end
up with work that's not quality."
In that area, there are some com-
mon challenges facing Pennywise.
"There is a shortage of qualified techni-
cians," said Klinger. "It's tough finding
drivers, but drivers are more readily
available than a good propane or oil
technician. They are both in demand."
For Pennywise, with all of its diver-
sification, both oil and propane pro-
vide the company with balance, and
Klinger remains bullish on the oil part
of the business.
"I still think the fuel oil business is a
good business," he said. "I think fuel oil
and propane will both be around for a
while. What would we replace them
with? Natural gas is not an option for
everyone. They [fuel oil and propane]
both have their benefits and for us it's
a very balanced situation. Frankly I'm a
bit amazed that many of these propane
companies don't consider offering fuel
oil. I think both products work well
together, even though they are very
different."
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