Building Easier AI

Put the Fuel in the Price, Not on the Bottom of the Bill

By William Daniel · October 30, 2026 · 7 min read

In Houzz's latest quarterly survey, 89% of construction firms said fuel costs hit their business in the third quarter: 53% paid suppliers higher delivery charges, 46% raised prices or added fuel surcharges to bids, and 44% absorbed the cost in lower margins (Houzz, Oct 21). Firms could give more than one answer, and Houzz, which sells software to contractors, surveyed firms on its own site.

The quick fix, a fuel line added to the bill after the work, has a problem on a homeowner's job in California. Asked "Does this law prohibit a business from advertising one price and adding a variable service fee later in the transaction?", the state attorney general's FAQ on its hidden-fee law answers "Yes" (California AG).

The duller fix: know your fuel cost per job, and put it in the price you quote. It's probably smaller than it feels, 1.81% of remodelers' revenue in the 2022 Economic Census (our arithmetic). The size is the easy part. Where fuel shows up on the bill is the part with rules.

Fuel is a running cost, not a material line

Two weeks ago we wrote about the escalation clause, which ties one material line to its BLS index so the price moves with it, up or down. Fuel isn't bought for one job: it's a running cost of every job a truck drives to, so the hard question is where the client sees it.

What fuel weighs in a construction business

The 2022 Economic Census, which counts only businesses with paid employees, recorded what they spent on gasoline and diesel. As a share of revenue (our arithmetic from Census's flat file, a zip download):

Residential remodelers: 1.81%
Plumbing, heating and air-conditioning contractors: 1.73%
General contractors building new homes for clients: 1.90%
For-sale builders: 0.52%
All construction: 1.84%

About 90% of the remodelers' fuel was for on-highway use.

EIA's annual averages put diesel at $4.989 a gallon in 2022 and $3.660 in 2025, gasoline at $3.951 and $3.097 (EIA). Against Oct 26's $6.352 and $4.269 (EIA), diesel is 27% above its 2022 average and 74% above 2025's; gasoline, 8% and 38% (our arithmetic).

From here it's our model, not a measurement. Holding a remodeler's 2022 fuel use per dollar of revenue steady, fuel comes to about 1.3–1.4% of revenue at 2025's average prices and 2.0–2.3% at Oct 26's, depending on the mix of gasoline and diesel. Absorbed for a year at today's prices, the difference is roughly half a point to a full point of margin. The model also assumes today's prices hold and job prices haven't risen since 2022; risen job prices would lower the share.

The case for leaving fuel alone

At about 2% of revenue, fuel is real money on a thin margin but small beside materials (35% of remodelers' revenue in the same census) or payroll (18%; our arithmetic), and there's a fair case for doing nothing new.

That 1.81% was measured at 2022's prices, and today's gasoline is only 8% above its 2022 average, against 27% for diesel. Diesel's jump from 2025 is the bigger one too, and diesel runs the equipment, heavy trucks and deliveries. A remodeler in gasoline pickups feels less of it at the pump than the headlines suggest, and more in suppliers' delivery charges, which belong in the materials price you already mark up.

Passing fuel on isn't unusual, either: 46% of Houzz's construction firms did. For most owners the question is how and when, not whether.

Fuel falls, too. Diesel's $6.352 on Oct 26 was the third-highest week in EIA's records since 1994, before inflation, and already below its Sept 21 peak of $6.529 (our check of EIA's series). A price built on this month's high overcharges the client if fuel drops before the job starts, which argues, on a long job, for a disclosed adjustment term built like the escalation clause rather than a padded price. On a California homeowner's job, have your attorney read that term against the attorney general's answer on variable fees.

And the survey is a vendor's. Houzz's release gives only its total sample, 998 construction and design firms on Houzz, not the question it asked or how many construction firms stand behind the 89%.

Your own fuel, per job

Your own fuel cost per job comes from your trucks: round trips × miles per round trip ÷ miles per gallon × price per gallon.

Take an illustrative kitchen, with figures invented for the arithmetic: 30 round trips of 40 miles in a pickup getting 15 miles to the gallon is 80 gallons, about $342 at Oct 26's gasoline price and $248 at 2025's average. In a diesel truck at the same mileage, about $508 against $293. On an illustrative $60,000 kitchen, that's about 0.6% of the price in gasoline and 0.8% in diesel (our arithmetic).

Add the trips the schedule doesn't show (supply-house runs, the inspection that moved, the punch-list visit), and check the total against last year's fuel spend divided by last year's jobs. Then carry the figure in the job's costs, under your markup like any other cost, and the client sees one price.

What California and Minnesota say about the bottom of the bill

California's Civil Code §1770(a)(29), in force from July 1, 2024 according to the attorney general, lists, among the practices unlawful "in a transaction intended to result or that results in the sale or lease of goods or services to any consumer," this one: "(A) Advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges other than either of the following: (i) Taxes or fees imposed by a government on the transaction. (ii) Postage or carriage charges that will be reasonably and actually incurred to ship the physical good to the consumer." A fuel surcharge is neither exception.

The attorney general's FAQ adds that mandatory charges "used to pay business costs" can't be left out of the price, and a fuel surcharge is one, in our reading. Disclosing it up front doesn't cure that: asked whether a business can comply by "listing or advertising one price and separately stating that an additional percentage fee will apply," the FAQ answers "No." But it calls the law "a transparency law – not a price control law," under which a business may "provide a subsequent breakdown" of charges "included in its listed or advertised price": fuel shown as a line inside a total the client saw first isn't fuel added after it (our reading). And the law "does not apply to the purchase or lease of goods or services for commercial use."

For home improvement contracts, California's Business and Professions Code §7159.5(a)(1) adds: "The contract amount shall include the entire cost of the contract, including profit, labor, and materials, but excluding finance charges." A fuel charge added later sits badly with that, too (our reading).

Minnesota's rule, in force since January 1, 2025 (§325D.44, subdivision 1a), makes it deceptive to advertise, display or offer "a price for goods or services that does not include all mandatory fees or surcharges." Unlike California's, it has an exception for services: a person offering services "where the total cost of a service is determined by consumer selections and preferences, or where the total cost of the service relates to distance or time, is compliant … if the person discloses in a clear and conspicuous manner (1) the factors that determine the total price, (2) any mandatory fees associated with the transaction, and (3) that the total cost of the services may vary." A remodel priced on the client's selections may fit the first half, so a fuel fee disclosed that way may pass in Minnesota where it wouldn't in California (our reading).

The FTC's fee rule doesn't reach contractors: 16 CFR 464.1 says "Covered good or service means: (1) Live-event tickets; or (2) Short-term lodging."

We read California's sections on california.public.law, a private mirror labelled 2025, because the legislature's site blocked us (the FAQ cites Section 1770(a)(29) and matches it); Minnesota's on the revisor's site; the federal rule on the eCFR, linked through Cornell's copy. We didn't read Colorado's, Virginia's or Massachusetts' rules, any enforcement against a contractor, or anything on an indexed adjustment clause in a California contract, which the FAQ doesn't name. Nothing here is legal advice: take your quote format and contract terms to your attorney before you change either.

The same sum for a service van, a shop and a route

Beyond the remodel the per-job sum works the same; the rules bend. A plumbing or HVAC shop's fuel runs 1.73% of revenue in the Economic Census, and an hourly service call fits the second half of Minnesota's exception, a total cost that "relates to distance or time": with the three disclosures, a trip charge can stand as a fee there (our reading). California has no such exception. A fabricator's delivery sits nearer California's carriage exception, for charges "reasonably and actually incurred to ship the physical good to the consumer," not a fuel charge on labor. A route billing businesses is outside California's law; Minnesota's subdivisions 1a and 1b have no such carve-out.

The fuel gets paid either way

Passed on to clients or absorbed in margin, the fuel got paid for. What differed was who saw it, and when. In the price, the client sees it once, on page one, inside a number they agreed to. At the bottom of a California homeowner's bill, or beside the price as a percentage, it's what the attorney general's FAQ says the law prohibits. On work billed to a business there, a separate fuel line is still yours to offer, priced from the same per-job sum.