Refrigerant cost rises astronomically

The cost of bulk refrigerants is expected to increase by 300 to 600 percent as a result of the Australian government’s carbon tax, Thermo King has warned in a notice to its customers.

A world leader in transport refrigeration, Thermo King manufactures temperature control systems for road transport trailers and truck bodies, buses, shipping containers and rail cars.

The notice alerts customers that Thermo King will be affected in two ways by the cost increase. It says there will be an increase in pre-charged equipment import costs due to imposition of the carbon price on the refrigerant content of the machines.

‘Since refrigerant content represents a small proportion of the overall value of the imported machine, Thermo King intends to pass on the increase at import cost value. This will result in a price increase to our dealers of up to 2.3 per cent,’ the notice says.

The notice also informs that warranty costs over the warranty period of the equipment will increase because of the need to pay for the refrigerants used in warrantable repairs. Non-warrantable repairs will also increase in cost.

‘Non-warrantable repairs involving refrigerant supply, performed by TK dealers or other service providers, will be subject to very significant cost increases based upon the new billable rate of the service provider.’

The notice says that purchases of new pre-charged equipment imported to Australia prior to July 1, 2012 should not incur any price increase.

‘Certain models of non-unitary configuration, however, are imported without refrigerant. Installation and charging of new, non-pre-charged machines should not experience any price increase if the dealer is using refrigerants imported prior to July 1. If a dealer is required to charge the new system with post-July import refrigerant, the customer will see a price rise depending on the new customer billable rate for that refrigerant.’

The notice stresses that Thermo King will work with its customers to help them manage the higher costs, including by improving service schedules and maintenance programs and increasing the level of refrigerant recovery.

‘TK is also planning to strategically engage with the government and industry associations to ensure that any future government compensation sufficiently addresses the commercial risks for Thermo King, its dealers and its customers.’



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