Better start stocking up on diapers and detergent. Consumers hit hard in recent months by sharply higher prices for gasoline and food should prepare to start paying more for various household items following Dow Chemical Co.’s decision to raise its prices by up to 20 percent to offset the soaring cost of energy.
The company, which announced the price increases Wednesday, took the unusual step of directing blame at the nation’s energy policy makers.
“For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America’s manufacturing sector and all consumers of energy,” Andrew Liveris, Dow Chemical’s chairman and chief executive, said in a written statement.
Dow Chemical’s spiraling costs are “forcing difficult discussions with customers,” he said.
The Midland, Mich.-based company supplies a broad swath of industries, from agriculture to health care, and any sizable price jumps would likely affect almost all of them.
The price increases will take effect Sunday and will be based on a product’s exposure to rising costs. Dow Chemical said it spent $8 billion on energy and hydrocarbon-based feedstock, or raw materials, back in 2002 and that could climb fourfold to $32 billion this year.
Dow Chemical makes everything from the propylene glycols used in antifreeze, coolants, solvents, cosmetics and pharmaceuticals, to acrylic acid-based products used in detergents, wastewater-treatment and disposable diapers.
It makes key ingredients used in paints, textiles, glass, packaging and cars.
The company, whose products are sold in 160 countries, last month reported a 3 percent drop in quarterly earnings amid a 42 percent jump in energy and raw materials costs.
Its profit margins shrank from 9.8 percent in 2005 to 7.6 percent in 2006, and to 5.4 percent last year. uring the 12-month period that ended March 31, the margin narrowed to 5.1 percent, according to Capital IQ.
Crude oil prices surpassed $135 a barrel last week, more than double the price from a year ago.