Praxair Inc., the world’s third-largest producer of industrial gases, said Monday it will impose a surcharge of as much as 10 percent to cover higher distribution costs stemming from a shortage of power, its most costly raw material.
The 90-day surcharge of 5 to 10 percent on products such as carbon dioxide, hydrogen and oxygen will affect about 80 percent of Praxair’s customers, including chemicals, metals and food-processing companies.
Power shortages, especially in the Midwest, forced the company to boost production at plants in other regions and then transport the gases longer distances to its customers.
Danbury-based Praxair isn’t alone in grappling with production interruptions caused by power shortages. Last month manufacturers in the Midwest, including steelmaker LTV Corp., closed plants as a two-day heat wave swelled electricity demand.
“Power shortages have increased our distribution costs and that’s why we’re having surcharges,” said Praxair spokesman Eric Jones. “If we can’t get the gases to our customers by the plants that normally service them, we need to truck them in.”
