SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

                                       OR

[_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from ___________________ to _________________


                        Commission file number: 001-15035

                                ABLE ENERGY, INC.
            (An exact name of registrant as specified in its charter)

         DELAWARE                                            22-3520840
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                           identification No.)


          198 GREEN POND ROAD
          ROCKAWAY, NJ                                          07866
(Address of principal executive offices)                      (Zip code)


Registrant's telephone number, including area code: (973) 625-1012


                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)


         Indicate by check X whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

         As of May 10, 2004, 2,013,250 shares, $.001 Par value per share, of
Able Energy, Inc. were issued and outstanding.


<PAGE>


      TABLE OF CONTENTS
      -----------------

                                                                           PAGE

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)

         Consolidated Balance Sheets as of June 30, 2003 and
            March 31, 2004                                                3 - 4

         Consolidated Statements of Income for the three and nine
            months ended March 31, 2004 and 2003                            5

         Consolidated Statement of Stockholders' Equity nine months
            ended March 31, 2004                                            6

         Consolidated Statements of Cash Flows for the nine months
            ended March 31, 2004 and 2003                                 7 - 8

         Notes to Unaudited Financial Statements                          9 - 29


<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                  ASSETS
                                  ------

                                                                      MARCH 31,          JUNE 30,
                                                                        2004               2003
CURRENT ASSETS:                                                      (UNAUDITED)         (AUDITED)
                                                                     -----------         ---------
<S>                                                                  <C>               <C>
    Cash                                                             $ 1,166,560       $   400,033
    Accounts Receivable (Less Allowance for Doubtful
       Accounts of  $90,472 (March 31) and $279,913 (June 30)          3,198,626         2,661,808
    Inventory                                                            924,380           789,422
    Notes Receivable - Current Portion                                    59,259            57,577
    Other Receivable - Non-Compete - Current Portion                     225,000                --
    Miscellaneous Receivables                                            124,385            70,503
    Prepaid Expenses                                                     339,592           395,982
    Insurance Claim Receivable                                                --           349,526
    Deferred Costs - Insurance Claims                                    544,902           703,675
    Due From Officer                                                      61,530                --
    Prepaid Expense - Income Taxes                                         2,063             2,063
    Deferred Income Tax                                                   33,047            73,777
                                                                     -----------         ---------
        TOTAL CURRENT ASSETS                                           6,679,344         5,504,366
                                                                     -----------         ---------

PROPERTY AND EQUIPMENT:
    Land                                                                 479,346           451,925
    Buildings                                                            946,046           946,046
    Trucks                                                             3,217,443         3,125,453
    Fuel Tanks                                                           660,927         1,455,501
    Machinery and Equipment                                              891,125           769,817
    Leasehold Improvements                                               600,204           597,759
    Cylinders                                                            164,637           755,496
    Office Furniture and Equipment                                       200,640           200,640
    Web Site Development Costs                                         2,317,994         2,274,575
                                                                     -----------         ---------
                                                                       9,478,362        10,577,212
    Less: Accumulated Depreciation and Amortization                    4,524,453         4,331,055
                                                                     -----------         ---------
        NET PROPERTY AND EQUIPMENT                                     4,953,909         6,246,157
                                                                     -----------         ---------

OTHER ASSETS:
    Deferred Income Taxes                                                 45,091            45,091
    Deposits                                                             121,780           165,541
    Other Receivable - Non-Compete - Less Current Portion                675,000           177,793
    Notes Receivable - Less Current Portion                              667,765                --
    Customer List, Less Accumulated Amortization of ($188,122)
        March 31 and June 30                                             422,728           422,728
    Covenant Not to Compete, Less Accumulated Amortization of
        $91,667 (March 31) and $76,667 (June 30)                           8,333            23,333
    Development Costs - Franchising                                       20,680            27,573
                                                                     -----------         ---------
         TOTAL OTHER ASSETS                                            1,961,377           862,059
                                                                     -----------         ---------

        TOTAL ASSETS                                                 $13,594,630       $12,612,582
                                                                     ===========       ===========
</TABLE>

                             See Accompanying Notes

                                        3

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEET (CONT'D)
                       LIABILITIES & STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           MARCH 31,           JUNE 30,
                                                                             2004                2003
CURRENT LIABILITIES:                                                      (UNAUDITED)          (AUDITED)
                                                                         ------------        ------------
<S>                                                                      <C>                 <C>
    Accounts Payable                                                     $  2,271,819        $  1,420,911
    Note Payable - Bank                                                       700,000                  --
    Note Payable - Other                                                      200,000             335,000
    Current Portion of Long-Term Debt                                         352,146           1,238,982
    Accrued Expenses                                                          330,022             735,370
    Accrued Taxes                                                              46,204              98,612
    Income Taxes Payable                                                      138,130                  --
    Deferred Income                                                             5,833                  --
    Customer Pre-Purchase Payments                                            593,900             936,680
    Customer Credit Balances                                                  264,382             416,644
    Escrow Deposits                                                            16,072               5,000
    Note Payable - Officer                                                         --             321,630
                                                                         ------------        ------------
        TOTAL CURRENT LIABILITIES                                           4,918,508           5,508,829


DEFERRED INCOME                                                                79,679              79,679
DEFERRED INCOME TAXES                                                          82,290              70,310
SHORT-TERM DEBT REFINANCED                                                         --           3,170,000
LONG-TERM DEBT: less current portion                                        3,660,731             296,472
                                                                         ------------        ------------
        TOTAL LIABILITIES                                                   8,741,208           9,125,290
                                                                         ------------        ------------

STOCKHOLDERS' EQUITY:
    Preferred Stock
    Authorized 10,000,000 Shares Par Value $.001 per share
     Issued - None
    Common Stock
    Authorized 10,000,000 Par Value $.001 per share Issued
      and Outstanding Shares 2,013,250 (2004) and 2,013,250 (2003)              2,014               2,014
    Paid in Surplus                                                         5,711,224           5,711,224
    Retained Earnings (Deficit)                                              (859,816)         (2,225,946)
                                                                         ------------        ------------
        TOTAL STOCKHOLDERS' EQUITY                                          4,853,422           3,487,292
                                                                         ------------        ------------

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $ 13,594,630        $ 12,612,582
                                                                         ============        ============
</TABLE>

                             See Accompanying Notes

                                        4

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS MARCH  31,              NINE  MONTHS ENDED MARCH 31,
                                                         --------------------------------        ------------------- ------------
                                                             2004                2003                 2004                2003
                                                         ------------        ------------        ------------        ------------
<S>                                                      <C>                 <C>                 <C>                 <C>
NET SALES                                                $ 17,495,340        $ 19,490,580        $ 36,772,902        $ 38,177,651

COST OF SALES                                              14,463,233          15,879,981          31,303,489          31,217,309
                                                         ------------        ------------        ------------        ------------

   GROSS PROFIT                                             3,032,107           3,610,599           5,469,413           6,960,342
                                                         ------------        ------------        ------------        ------------

EXPENSES
   Selling, General and Administrative Expenses             1,854,423           1,747,490           5,041,244           4,178,008
   Depreciation and Amortization Expense                      319,717             317,251             952,764             911,922
                                                         ------------        ------------        ------------        ------------
      TOTAL EXPENSES                                        2,174,140           2,064,741           5,994,008           5,089,930
                                                         ------------        ------------        ------------        ------------

   INCOME (LOSS) FROM OPERATIONS                              857,967           1,545,858            (524,595)          1,870,412
                                                         ------------        ------------        ------------        ------------

OTHER INCOME (EXPENSES):
   Gain on Sale of Subsidy                                  2,668,490                  --           2,668,490                  --
   Interest and Other Income                                   27,889              60,554              91,812             126,668
   Interest Expense                                          (138,424)           (151,137)           (572,628)           (340,223)
   Other (Expense) Income (Notes 10 and 22)                   394,500            (414,000)            394,500            (414,000)
   Legal and Professional Fees relating to Other
         (Expense) Income                                    (197,360)                 --            (500,609)                 --
                                                         ------------        ------------        ------------        ------------
      TOTAL OTHER INCOME (EXPENSES)                         2,755,095            (504,583)          2,081,565            (627,555)
                                                         ------------        ------------        ------------        ------------

   INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES          3,613 062           1,041 275           1,556,970           1,242,857

PROVISION (REDUCTION) FOR INCOME TAXES                        143,440             (39,890)            190,840             (32,890)
                                                         ------------        ------------        ------------        ------------

   NET INCOME (LOSS)                                     $  3,469,622        $  1,081,165        $  1,366,130        $  1,275,747
                                                         ============        ============        ============        ============

BASIC INCOME (LOSS) PER COMMON SHARE                     $       1.72        $        .54        $        .68        $        .63
                                                         ============        ============        ============        ============

DILUTED INCOME (LOSS) PER COMMON SHARE                   $       1.70        $        .53        $        .67        $        .62
                                                         ============        ============        ============        ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
   OUTSTANDING - USED IN BASIC                              2,013,250           2,009,814           2,013,250           2,009,814
                                                         ============        ============        ============        ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
   OUTSTANDING - USED IN DILUTED                            2,040,588           2,052,751           2,040,588           2,052,751
                                                         ============        ============        ============        ============
</TABLE>

                             See Accompanying Notes

                                        5

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                        NINE MONTHS ENDED MARCH 31, 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                        COMMON STOCK
                                       .001 PAR VALUE
                               -----------------------------
                                                                    ADDITIONAL                             TOTAL
                                                                     PAID-IN          RETAINED         STOCKHOLDERS'
                                  SHARES           AMOUNT            SURPLUS          EARNINGS             EQUITY
                               -----------       -----------       -----------       -----------        -----------
<S>                            <C>               <C>               <C>               <C>                <C>
Balance - July 1, 2003           2,013,250       $     2,014       $ 5,711,224       $(2,225,946)       $ 3,487,292
                               -----------       -----------       -----------       -----------        -----------
                                                                                                          1,366,130
                                                                                                        -----------
Net Income                                                                             1,366,130
                                                                                     -----------
                                                                                                        $ 4,853,422
                                                                                                        ===========

Balance - March 31, 2004         2,013,250       $     2,014       $ 5,711,224       $  (859,816)
                                 =========       ===========       ===========       ===========
</TABLE>



                             See Accompanying Notes

                                        6

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF CASH FLOW
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                     NINE MONTHS ENDED MARCH  31,
                                                                             UNAUDITED
                                                                      2004              2003
<S>                                                               <C>                <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net Income (Loss) - Continuing Operations                      $ 1,366,130        $ 1,275,747
   Adjustments to Reconcile Net Income (Loss) to Net Cash
    used by Operating Activities:
      Depreciation and Amortization                                   952,764            911,922
      Other Expense (Income)                                         (394,500)           414,000
      Directors' Fees                                                      --             24,000
      Gain on Disposal of Equipment                                        --                (44)
      Gain on Sale of Subsidiary                                   (2,668,490)                --
      Gain on Sale of Subsidiary - Non-Cash                         1,400,000                 --
      (Increase) Decrease in:
         Accounts Receivable                                         (536,818)        (2,429,365)
         Inventory                                                   (134,958)          (549,953)
         Prepaid Expenses                                              56,390            (76,560)
         Insurance Claim Receivable                                   349,526           (238,099)
         Deferred Costs Insurance Claims                     158,773   43,761                 --
         Deposits                                                      40,730   (65,000) (43,400)
         Deferred Income Tax - Asset
      Increase (Decrease) in:
         Accounts Payable                                             850,908          1,194,466
         Accrued Expenses                                            (457,756)           (44,288)
         Customer Advance Payments                                   (342,780)          (494,559)
         Customer Credit Balance                                     (152,262)          (375,833)
         Deferred Income Taxes                                         11,980             10,510
         Deferred Income                                                5,833                 --
         Escrow Deposits                                               11,072            (12,400)
         Income Taxes Payable                                         138,130                 --
                                                                  -----------        -----------
           NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES           698,433           (498,856)
                                                                  -----------        -----------
CASH FLOW FROM INVESTING ACTIVITIES
   Purchase of Property and Equipment                              (1,034,781)
   Web Site Development Costs                                         (43,419)          (810,415)
    Increase in Deposits                                                   --            (41,824)
    Disposition of Equipment                                       (1,297,433)            (8,845)
    Payment on Notes Receivable - Sale of Equipment                     8,346              1,726
    Cash Received Sale of Equipment & Inventory-Subsidiary          3,000,000             13,359
    Note Receivable - Montgomery                                           --                 --
    Other Receivables                                                 (53,882)               655
    Receivable - Officer                                              (61,530)            22,961
                                                                  -----------        -----------
          NET CASH (USED) PROVIDED  BY INVESTING ACTIVITIES       $   517,301        $  (822,383)
                                                                  ===========        ===========
</TABLE>

                             See Accompanying Notes

                                        7

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF CASH FLOW (CONT'D)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    NINE MONTHS ENDED MARCH 31,
                                                                             UNAUDITED
                                                                       2004               2003
                                                                   -----------        -----------
CASH FLOW FROM FINANCING ACTIVITIES
<S>                                                                <C>                <C>
   Notes Payable - Bank                                            $   700,000        $        --
   (Decrease) in Notes Payable - Bank                               (1,270,000)          (200,000)
   (Decrease) Increase in Notes Payable - Other                     (1,385,000)           850,000
   Decrease in Long-Term Debt                                       (3,289,892)          (496,824)
   Increase in Long-Term Debt                                        5,117,315            607,789
   Note Payable - Officer                                             (321,630)           313,604
                                                                   -----------        -----------
           NET CASH (USED) PROVIDED  BY FINANCING ACTIVITIES          (449,207)         1,074,569
                                                                   -----------        -----------

NET (DECREASE) INCREASE IN CASH                                        766,527           (246,670)
Cash - Beginning of Year                                               400,033            258,560
                                                                   -----------        -----------
Cash - End of Year                                                 $ 1,166,560        $    11,890
                                                                   ===========        ===========

The Company had Interest Cash Expenditures of:                     $   578,123        $   315,223
The Company had Tax Cash Expenditures of:                          $    59,638        $    22,167
</TABLE>

                             See Accompanying Notes

                                        8

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            PRINCIPLES OF CONSOLIDATION

      The consolidated financial statements include the accounts of Able Energy,
      Inc. and its subsidiaries. The minority interest of 1% in Able Propane,
      LLC is immaterial and has not been shown separately. All material
      inter-company balances and transactions were eliminated in consolidation.

            MAJORITY OWNERSHIP

      The Company is the majority owner, owning 70.6% of the issued shares of a
      subsidiary, PriceEnergy.Com, Inc. in which their capital investment is
      $25,000. The subsidiary has established a E-Commerce Operating System for
      the sale of products through a network of suppliers originally on the East
      Coast of the United States. The Web Site became active in October 2000
      (See Notes 8 and 13).

            MINORITY INTEREST

      The minority interest in PriceEnergy.Com, Inc. is a deficit and, in
      accordance with Accounting Research Bulletin No. 51, subsidiary losses
      should not be charged against the minority interest to the extent of
      reducing it to a negative amount. As such, the losses have been charged
      against the Company, the majority owner. The loss for nine months ended
      March 31, 2004 is $396,071 (See Notes 8 and 13).

      The consolidated interim financial statements included herein have been
      prepared by the Company, without audit, pursuant to the rules and
      regulations of the Securities and Exchange Commission. Certain information
      and footnote disclosures normally included in financial statements
      prepared in accordance with generally accepted accounting principles have
      been condensed or omitted pursuant to such rules and regulations, although
      the Company believes that the disclosures are adequate to make the
      information presented not misleading.

      These statements reflect all adjustments, consisting of normal recurring
      adjustments which, in the opinion of management, are necessary for fair
      presentation of the information contained therein. It is suggested that
      these consolidated financial statements be read in conjunction with the
      financial statements and notes thereto included in the Company's annual
      report for the year ended June 30, 2003. The Company follows the same
      accounting policies in preparation of interim reports.

                                        9

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

      Results of operations for the interim periods are not indicative of annual
      results.

      NATURE OF OPERATIONS

      Able Oil Company, Able Melbourne and Able Energy New York, Inc. are full
      service oil companies that market and distribute home heating oil, diesel
      fuel and kerosene to residential and commercial customers operating in the
      northern New Jersey, Melbourne, Florida, and Warrensburg, New York
      respectively. Able Propane, installs propane tanks which it owns and sells
      propane for heating and cooking, along with other residential and
      commercial uses. Able propane, LLC was sold March 3, 2004, and the Company
      is no longer selling propane (See Note 22).

      The Company's operations are subject to seasonal fluctuations with a
      majority of the Company's business occurring in the late fall and winter
      months. Approximately 70% of the Company's revenues are earned and
      received from October through March, and the overwhelming majority of such
      revenues are derived from the sale of HVAC products and services and home
      heating fuel. However, the seasonality of the Company's business is
      offset, in part, by the increase in revenues from the sale of diesel and
      gasoline fuels during the spring and summer months due to the increased
      use of automobiles and construction apparatus.

      INVENTORIES

      Inventories are valued at the lower of cost (first in, first out method)
      or market.

            PROPERTY AND EQUIPMENT

      Property and equipment are stated at cost less accumulated depreciation.
      Depreciation is provided by using the straight-line method based upon the
      estimated useful lives of the assets (5 to 40 years). Depreciation expense
      for the nine months ended March 31, 2004 and 2003 amounted to $585,491 and
      $557,915, respectively.

      For income tax basis, depreciation is calculated by a combination of the
      straight-line and modified accelerated cost recovery systems established
      by the Tax Reform Act of 1986, and accelerated special depreciation per
      the Tax Acts of 2002 and 2003.

      Expenditures for maintenance and repairs are charged to expense as
      incurred whereas expenditures for renewals and betterments are
      capitalized.

      The cost and related accumulated depreciation of assets sold or otherwise
      disposed of during the period are removed from the accounts. Any gain or
      loss is reflected in the year of disposal.


                                       10

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)


            E-COMMERCE OPERATING SYSTEM DEVELOPMENT COSTS

      Costs of $2,317,994 incurred in the developmental stage and thereafter for
      computer hardware and software have been capitalized in accordance with
      accounting pronouncement SOP98-1. The costs are included in Property and
      Equipment and will be amortized on a straight line basis during the
      estimated useful life, 5 years. Operations commenced in October 2000.
      Amortization for the nine months ended March 31, 2004 and 2003 amounted to
      $345,380 and $332,114, respectively.

            INTANGIBLE ASSETS

      Intangibles are stated at cost and amortized as follows:

      Customer Lists of $571,000 related to the Connell's Fuel Oil Company
      acquisition on October 28, 1996, by Able Oil Company was being amortized
      over a straight-line period of 15 years. The current period amortization
      also includes a customer list of $39,850 and Covenant Not To Compete of
      $100,000 relating to the acquisition from B & B Fuels on August 27, 1999,
      is being amortized over a straight-line period of 10 and 5 years,
      respectively. The amortization for the nine months ended March 31, 2004
      and 2003 are $15,000 and $15,000, respectively.

      In July 2001, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards No. 142, "Goodwill and Other
      Intangible Assets" ("SFAS 142"). SFAS 142 requires goodwill and other
      intangible assets to be tested for impairment under certain circumstances,
      and written off when impaired, rather than being amortized as previous
      standards required, as such, effective July 1, 2001, the Customer List
      will no longer be amortized for financial statement purposes.

      For income tax basis, the Customer Lists and the Covenant Not To Compete
      are being amortized over a straight-line method of 15 years as per the Tax
      Reform Act of 1993.

            USE OF ESTIMATES

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the amounts reported in the financial statements
      and accompanying notes. Although these estimates are based on management's
      knowledge of current events and actions it may undertake in the future,
      they may ultimately differ from actual results.


                                       11

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

      INCOME TAXES

      Effective January 1, 1997, all the subsidiaries, which were
      S-Corporations, terminated their S-Corporation elections. The subsidiaries
      are filing a consolidated tax return with Able Energy, Inc.

      Effective January 1, 1997, the Company has elected to provide for income
      taxes based on the provisions of Financial Accounting Standards Board
      ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 109,
      "Accounting for Income Taxes", which requires recognition of deferred tax
      assets and liabilities for the expected future tax consequences of events
      that have been included in the financial statements and tax returns in
      different years. Under this method, deferred income tax assets and
      liabilities are determined based on the difference between the financial
      statement and tax bases of assets and liabilities using enacted tax rates
      in effect for the year in which the differences are expected to reverse.

      CONCENTRATIONS OF CREDIT RISK

      The Company performs ongoing credit evaluations of its customers'
      financial conditions and requires no collateral from its customers.

      Financial instruments which potentially subject the Company to
      concentrations of credit risk consists of checking and savings accounts
      with several financial institutions in excess of insured limits. The
      excess above insured limits is approximately $346,297. The Company does
      not anticipate non-performance by the financial institutions.

            CASH

            For the purpose of the statement of cash flows, cash is defined as
            balances held in corporate checking accounts and money market
            accounts.

            ADVERTISING EXPENSE

      Advertising costs are expensed at the time the advertisement appears in
      various publications and other media. The expense was $508,510 and
      $341,961 for the nine months ended March 31, 2004 and 2003, respectively.

      FAIR VALUE OF FINANCIAL INSTRUMENTS

      Carrying amounts of certain of the Company's financial instruments,
      including cash and cash equivalents, accrued compensation, and other
      accrued liabilities, approximate fair value because of their short
      maturities.


                                       12

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

            REVENUE RECOGNITION

      Sales of fuel and heating equipment are recognized at the time of delivery
      to the customer, and sales of equipment are recognized at the time of
      installation. Revenue from repairs and maintenance service is recognized
      upon completion of the service. Payments received from customers for
      heating equipment service contracts are deferred and amortized into income
      over the term of the respective service contracts, on a straight line
      basis, which generally do not exceed one year.

            COMPUTATION OF NET INCOME (LOSS) PER SHARE

      Basic net income (loss) per share is computed using the weighted-average
      number of common shares outstanding during the period. Diluted net income
      per share is computed using the weighted-average number of common and
      dilutive potential common shares outstanding during the period. Diluted
      net loss per share is computed using the weighted-average number of common
      shares and excludes dilutive potential common shares outstanding, as their
      effect is anti-dilutive. Dilutive potential common shares primarily
      consist of employee stock options.

            IMPAIRMENT OF LONG-LIVED ASSETS

      Long-lived assets to be held and used are reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount of
      such assets may not be recoverable. Measurement of an impairment loss for
      long-lived assets that management expects to hold and use is based on the
      fair value of the asset. Long-lived assets to be disposed of are reported
      at the lower of carrying amount or fair value less costs to sell.

            RECENT ACCOUNTING PRONOUNCEMENTS

      FASB Interpretation No. 45 (FIN 45), "Guarantor's Accounting and
      Disclosure Requirements for Guarantees, Including Indirect Guarantees of
      Indebtedness of Others." In November 2002, the FASB issued FIN 45 which
      requires a guarantor to recognize a liability for the fair value of the
      obligation it assumes under certain guarantees. Additionally, FIN 45
      requires a guarantor to disclose certain aspects of each guarantee, or
      each group of similar guarantees, including the nature of the guarantee,
      the maximum exposure under the guarantee, the current carrying amount of
      any liability for the guarantee, and any recourse provisions allowing the
      guarantor to recover from third parties any amounts paid under the
      guarantee. The disclosure provisions of FIN 45 are effective for financial
      statements for both interim and annual periods ending after December 15,
      2002. The fair value measurement provisions of FIN 45 are to be adopted as
      of July 1, 2003. The Company has no obligation effected by this
      pronouncement.


                                       13

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

            RECENT ACCOUNTING PRONOUNCEMENTS (CONT'D)

      SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and
      Disclosure (an amendment of FASB Statement No. 123)." In December 2002,
      the FASB issued SFAS No. 148, which amends SFAS No. 123, "Accounting for
      Stock-Based Compensation," and provides alternative methods of transition
      for a voluntary change to the fair value-based method of accounting for
      stock-based employee compensation; SFAS No. 148 also amends the disclosure
      requirements of SFAS No. 123 and APB Opinion No. 28, "Interim Financial
      Reporting," to require prominent disclosures in both annual and interim
      financial statements about the method of accounting for stock-based
      employee compensation and the effect of the method used on reported
      results. The provisions of SFAS No. 148 are effective for financial
      statements for periods ending after December 15, 2002. The Company will
      adopt SFAS No. 148 effective July 1, 2003. It currently has no effect on
      the Company.

            DEBT EXTINGUISHMENT

      In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
      Statements Nos. 4, 44 and 64, Amendment of FASB Statement No. 13, and
      technical Corrections." Among other things, this statement rescinds SFAS
      No. 4, "Reporting Gains and Losses from Extinguishment of Debt" (SFAS No.
      4), which required all gains and losses from extinguishment of debt to be
      aggregated and, if material, classified as an extraordinary item, net of
      the related income tax effect. As a result, the criteria in Accounting
      Principles Board Opinion No. 30, "reporting the Results of Operations -
      Reporting the Effects of Disposal of a Segment of a Business, and
      Extraordinary, Unusual and Infrequently Occurring Events and
      Transactions," which requires gains and losses on extinguishment of debts
      to be classified as income or loss from continuing operations, will now be
      applied. We adopted the provisions of this statement as of July 1, 2002,
      as it was effective for years beginning after June 15, 2002.

            EXIT COSTS AND DISPOSAL ACTIVITIES

      In June 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
      with Exit or Disposal Activities" (SFAS NO. 146), which addresses
      financial accounting and reporting for costs associated with exit or
      disposal activities and nullifies Emerging Issues Task Force No. 94-3,
      "Liability Recognition for Certain Employee Termination Benefits and Other
      Costs to Exit an Activity (including Certain Costs Incurred in a
      Restructuring)" (EITF 94-3). The principal difference between SFAS No. 146
      and EITF 94-3 relates to SFAS No. 146's requirements for recognition of a
      liability for a cost associated with an exit or disposal activity. SFAS
      No. 146 requires that a liability for a cost associated with an exit or
      disposal activity be recognized when the liability is incurred. Under EITF
      94-3, a liability for an exit cost as generally defined in EITF 94-3 was
      recognized at the date of an entity's commitment to an exit plan. We will
      adopt the new standard effective July 1, 2003. This currently has no
      effect on the Company's operations.


                                       14

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

            ASSET RETIREMENT OBLIGATIONS

      Effective January 1, 2003, the Company has adopted SFAS No. 143,
      "Accounting for Asset Retirement Obligations" (SFAS No. 143). This
      statement provides the accounting for the cost of legal obligations
      associated with the retirement of long-lived assets. SFAS No. 143 requires
      that companies recognize the fair value of a liability for asset
      retirement obligations in the period in which the obligations are incurred
      and capitalize that amount as part of the book value of the long-lived
      asset. SFAS No. 143 also precludes companies from accruing removal costs
      that exceed gross salvage in their depreciation rates and accumulated
      depreciation balances if there is no legal obligation to remove the
      long-lived assets. The adoption had no current effect on the financial
      records.

NOTE 2 NOTES RECEIVABLE

A.    The Company has a Receivable from Able Montgomery, Inc. and Andrew W.
      Schmidt related to the sale of Able Montgomery, Inc. to Schmidt, and truck
      financed by Able Energy, Inc. No payments of principal or interest had
      been received for more than one year. A new Note was drawn dated June 15,
      2000 for $170,000, including the prior balance, plus accrued interest. The
      Note bears interest at 9.5% per annum and payments commence October 1,
      2000. The payments will be monthly in varying amount each year with a
      final payment of $55,981.07 due September 1, 2010. No payments were
      received in the year ended December 31, 2000. In February 2001, two (2)
      payments were received in the amount $2,691.66, interest only. In
      September 2001, $15,124.97 was received covering payments from December
      2000 through October 2001, representing interest of $14,804.13 and
      principal of $320.84. Payments were received in November and December
      2002, representing December 2001 and January 2002, a total of $3,333.34;
      interest of $2,678.88, and principal of $654.46.

      The Note is secured by a pledge and security agreement and stock purchase
      agreement (Stock of Able Montgomery, Inc.), dated December 31, 1998, and
      the assets of Andrew W. Schmidt with the Note dated June 15, 2000. The
      income on the sale of the company in December 1998 and the accrued
      interest on the drawing of the new Note are shown as deferred income in
      the amount of $79,679.18 to be realized on collection of the notes.

      Maturities of the Note Receivable are as follows:

          FOR THE 12 MONTHS ENDING
                  MARCH 31,                        PRINCIPAL AMOUNT
                   2005                               $ 28,659
                   2006                                 12,219
                   2007                                 13,432
                   2008                                 14,765
                   2009                                 16,230
                   Balance                              83,396
                                                      --------
                        TOTAL                         $168,701
                                                      ========


                                       15

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 2 NOTES RECEIVABLE (CONT'D)

B.    Able Oil Company has three (3) Notes Receivable for the sale of oil
      delivery trucks to independent drivers who also deliver oil for the
      Company. The Notes bear interest at the rate of 12% per annum. One Note
      began December 1998, one began February 1999 and one began January 2004.
      The Notes are payable eight (8) months per year September through April,
      the oil delivery season.

      Maturities of these Notes Receivable are as follows:

           FOR THE 12 MONTHS ENDED
                  MARCH 31,                       PRINCIPAL AMOUNT
                  ---------                       ----------------
                    2005                              $30,600
                    2006                                6,028
                    2007                                4,566
                    2008                                4,887
                    2009                                5,233
                    Balance                             7,009
                                                      -------
                            TOTAL                     $58,323
                                                      =======

NOTE 3 INVENTORIES

           ITEMS                                  MARCH 31,         JUNE 30,
                                                    2004              2003
                                                 ---------         ---------
           Heating Oil                           $ 394,609         $ 241,107
           Diesel Fuel                              24,975            18,921
           Kerosene                                  4,059             2,534
           Propane                                   7,448             8,851
           Parts, Supplies and Equipment           493,289           518,009
                                                 ---------         ---------
                TOTAL                            $ 924,380         $ 789,422
                                                 =========         =========

NOTE 4 NOTES PAYABLE BANK

A.    On September 22, 2003, the Company closed a new loan facility with UPS
      Capital Business Credit. The facility is a $4,300,000 term loan, payable
      over fifteen (15) years with interest at the prime rate, plus 1.75%, and a
      line of credit of $700,000 with interest at prime plus 1.00%. The payments
      on the term loan, due the first of each month, include principal, interest
      of $35,900.04, and real estate tax escrow of $2,576.63, totaling
      $38,476.67. Real estate tax escrow of $7,745.03 was paid at closing.
      September 30, 2003 was the first payment and included nine (9) days of
      interest plus principal totaling $20,382.02. Any payment received more
      than five (5) days after the due date is subject to a late charge of 5% of
      such payment. Upon the occurrence of an event of default, the loan shall
      bear interest at five percentage points (5%) above the rate otherwise in
      effect under the loan.

      On March 3, 2004, the Company repaid $1,100,000 of the term loan principal
      balance. The monthly payments of principal and interest were reduced to
      $26,672.65, commencing with the payment due April 1, 2004 which was paid
      by the Company in March 2004. All other terms of the loan will remain the
      same (See Note 22).


                                       16

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 4 NOTES PAYABLE BANK (CONT'D)


A.    The collateral will be as follows for the term loan:

      1.    A first mortgage on properties located at 344 Route 46, Rockaway, NJ
            and 38 Diller Avenue, Newton, NJ

      1.    A first security interest in equipment and fleet vehicles

      1.    A first security interest in the customer list

            TERMS AND COLLATERAL RELATED TO THE REVOLVING LINE OF CREDIT

      Interest is payable monthly on the first day of each month, in arrears.
      This loan shall be paid down annually for a minimum of thirty (30) days at
      the borrower's discretion, but prior to renewal. The maturity is annually
      renewing from the closing date. This part of the loan is secured by a
      first priority lien on accounts receivable and inventory.

      The Revolving Line of Credit will have rates supported by 75% on accounts
      receivable less than 90 days outstanding, plus 50% on inventory. The
      outstanding balance at March 31, 2004 is $700,000.

      The loan facility is guaranteed by Able Energy, Inc. Officers loans are
      subordinated to the lender and will remain standstill until all debt due
      to the lender is paid in full.

            The agreement contains certain financial covenants:


      1.    Limit of unfinanced capital expenditures not to exceed $350,000 for
            fiscal year 2004.

            The Company paid the following loans on September 22, 2003:


<TABLE>
<CAPTION>
<S>                                                      <C>
                  Fleet Bank                             $ 1,340,644 (including interest and fees of $70,644)
                  KMA Associates                             750,000
                  Jeff Will                                  505,000 (including interest of $5,000)
                  Estate of Birdsal                          657,895 (including interest of $7,895)
                  Long-term Debt                           1,084,866
                                                         -----------
                             Total Refinance               4,338,405
                  Other Fees and Costs Paid at Closing       123,198
                                                         -----------
                             Total                       $ 4,461,603
                                                         ===========
</TABLE>


      The loan advanced was $4,300,000, the balance of $161,603 was paid by the
      Company.

      The balance of the term loan at March 31, is        $3,099,661
      Included in current portion of long-term debt          142,871
                                                          ----------
      Included in long-term debt - less current portion   $2,956,790
                                                          ==========


                                       17

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 4 NOTES PAYABLE BANK (CONT'D)

B.    On October 22, 2001, the Company and its subsidiaries, either as Borrower
      or Guarantor, entered into a loan and security Agreement with Fleet
      National Bank. The bank is providing the following credit facility.

      A borrowing base of 75% of Eligible Accounts Receivable, as defined in the
      Agreement, plus $500,000 against the value of the Company's customer list,
      for a total amount of $1,500,000. The revolving credit may also be used
      for Letters of Credit, with the lender's approval.

      The Letters of Credit will have an annual fee of 1.25% of the face value
      of each Letter of Credit. The applicable interest rate on the revolving
      credit advances will be the bank's prime rate or Libor interest rate, plus
      2.75%, see below increase in interest rate. Interest is to be paid on the
      amount advanced on the last day of each month.

      The Agreement had an expiration date of November 30, 2002. Fleet Bank did
      not renew the credit facility upon expiration of the Agreement on November
      30, 2002. Effective December 1, 2002, the bank is charging an additional
      annual interest of 4% as the Note is in default. The total current
      interest rate charged is currently 8.25% per annum. The Company and Lender
      have entered into a Forbearance Agreement, where the Lender is willing to
      forbear until May 31, 2003 from exercising its rights and remedies. The
      Lender will receive a forbearance fee of $50,000 at May 31, 2003, reduced
      by $2,500 for each week prior to May 31, 2003, that the credit facility
      and all charges are paid in full, with a minimum forbearance fee of
      $15,000. The interest charged is at 8.25% per annum. The principal amount
      outstanding was $1,270,000. Interest for the three months ended March 31,
      2004 was $18,062. The loan and the $50,000 forbearance fee were not paid
      at May 31, 2003. The Note payable plus forbearance fee, accrued interest
      and other costs were paid in full on September 22, 2003, in the amount of
      $1,340,644 (See Note 4 A). The bank released all the collateral securing
      the Company debt.


NOTE 5 NOTES PAYABLE

A.    The Company has borrowed $500,000 from an unrelated individual. The Note
      was dated June 26, 2001 with interest at 12% per annum. The interest will
      be paid monthly at $5,000 per month commencing on August 1, 2001. The Note
      will mature on June 26, 2002 unless the borrower (the Company), at its
      option, elects to extend the maturity date to December 26, 2002. The
      Company has exercised its option and has extended the Note to December 26,
      2002. The lender has granted the Company an additional extension at the
      same terms to June 26, 2003. The Lender has granted the Company an
      extension to July 26, 2003. The Note may be prepaid in whole or part from
      time-to-time without penalty. No principal payments have been made on the
      Note. At the maturity date, a final payment of the unpaid principal and
      interest shall be due and payable. In connection with this Note, the
      Company has issued the lender warrants to purchase 40,000 shares of its
      common stock at $4 per share. The warrants vest immediately and must be
      exercised no later than June 26, 2004. The warrants have not been
      registered under the Securities Act of 1933. The Note was paid in full on
      September 22, 2003 (See Note 4 A). The same individual loaned the Company
      $300,000 on February 12, 2004, to be paid $100,000 per month plus
      interest, at 6% per annum on March, April and May 15, 2004. The balance at
      March 31, 2004 was $200,000.


                                       18

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004

NOTE 5 NOTES PAYABLE

B.    The Company has borrowed $750,000 from an unrelated company. The mortgage
      and Note are dated September 13, 2002. The term of the Note is for one (1)
      year. Payments of interest only on the outstanding principal balance shall
      be paid monthly at a rate of 10%. The first payment was paid on November
      1, 2002 and on the first day of each month thereafter until October 1,
      2003, when the Note shall mature and all principal and accrued interest
      shall be due and payable in full. The Note was paid in full on September
      22, 2003 (See Note 4 A).

C.    The Company has borrowed $335,000 from an unrelated Company. The mortgage
      and Note are dated April 16, 2003. The loan is to Able Energy New York,
      Inc., a wholly owned subsidiary. The loan is collateralized by a mortgage
      on property in Lake George, New York owned by the subsidiary and a second
      mortgage on property in Bolton, New York, owned by the Company's CEO who
      is also a guarantor on the loan. Payments of interest only on the
      outstanding principal balance at a rate of 14% per annum, are payable
      monthly. The first payment was paid June 1, 2003. The entire amount, both
      principal and accrued interest shall be due and payable on May 1, 2004.
      The loan was paid in full on March 11, 2004

NOTE 6 LONG-TERM DEBT

      Mortgage note payable dated, August 27, 1999, related to the purchase of B
      & B Fuels facility and equipment. The total Note is $145,000. The Note is
      payable in the monthly amount of principal and interest of $1,721.18 with
      and interest rate of 7.5% per annum. The initial payment was made on
      September 27, 1999, and continues monthly until August 27, 2009 which is
      the final payment. The Note is secured by a mortgage made by Able Energy
      New York, Inc. on property at 2 and 4 Green Terrace and 4 Horican Avenue,
      Town of Warrensburg, Warren County, New York. The balance due on this Note
      at March 31, 2004 and June 30, 2003 was $91,708 and $101,724,
      respectively.

      Mortgage note payable dated, August 31, 1999, related to the purchase of
      the facility and equipment in Rockaway, New Jersey by Able Energy
      Terminal, LLC ("Terminal"). The Note is in the amount of $650,000.

      Pursuant to Section 4.4 of the Agreement of Sale to purchase the Terminal,
      the Principal Sum of the $650,000 Note shall be reduced by an amount equal
      to one-half of all sums expended by Borrower on the investigation and
      remediation of the property provided, however, that the amount of said
      reduction shall not exceed $250,000 (the "Remediation Amount").

      The Note is collateralized by the property and equipment purchased and
      assignment of the leases. The Note was paid in full on September 22, 2003
      in the amount of $650,000 plus interest of $7,895 (See Note 4 A).

      The Company has long-term debt represented by Notes Payable and
      capitalized leases collateralized by trucks, vans, office and computer
      equipment. The total outstanding at June 30, 2003 was $1,433,731. On
      September 22, 2003, $1,084,866 of these Notes, then outstanding, were paid
      in full (See Note 4 A).


                                       19

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
          NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENT (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 7 INCOME TAXES

      Effective January 1, 1997, the Company adopted Statement of Financial
      Accounting Standards No. 109, Accounting for Income Taxes.

      The differences between the statutory Federal Income Tax and Income Taxes
      Continuing Operation is accounted for as follows:

<TABLE>
<CAPTION>
                                                                           2004
                                                                           ----
                                                                  AMOUNT           PERCENT
                                                                  ------           -------
<S>                                                              <C>              <C>
          Statutory Federal Income Tax                           $ 586,695             34.0%
          Federal Income Tax Reduction due to Carryforward
              Loss                                                (531,070)
          State Income Tax                                         135,215              5.9
                                                                 ---------        ---------
          Income Taxes                                           $ 190,840             39.9%
                                                                 =========        =========

          Income Taxes consist of:
           Current                                               $ 138,130
           Deferred                                                 52,710
                                                                 ---------
              TOTAL                                              $ 190,840
                                                                 =========

          Statutory Federal Income Tax                           $ 513,619             34.0%
          Federal Income Tax Reduction due to Carryforward
          Loss                                                    (536,639)
          State Income Tax (Note X)                                159,980              5.9
          State Income Tax Reduction due to Carryforward
              Loss                                                (169,850)
          Income Taxes                                           $ (32,890)            39.9%
                                                                 =========        =========

          Income Taxes consists of:
          Current
          Deferred
               TOTAL                                             $      --
                                                                   (32,890)
                                                                 ---------
                                                                 $ (32,890)
                                                                 =========
</TABLE>

      (Note X) The State of New Jersey has suspended the use of carryforward
      losses for the years 2002 and 2003. As such, state income taxes of $45,091
      have been shown as a deferred asset and as income taxes payable for the
      year ended June 30, 2003. New Jersey carryforward is treated separately by
      the Company. Able Oil Company has a New Jersey Operating Loss of $501,010
      which could not be utilized in the current year ended June 30, 2003. Under
      current New Jersey law, the carryforward will be available after 2003, the
      Company's fiscal year ending June 30, 2005.


                                       20

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 7 INCOME TAXES (CONT'D)

      The types of temporary differences between the tax bases of assets and
      liabilities and their financial reporting amounts that give rise to a
      significant portion of the deferred tax liability and deferred tax asset
      and their approximate tax effects are as follows at:

<TABLE>
<CAPTION>
                                                                  MARCH 31, 2004

                                                           TEMPORARY            TAX
                                                           DIFFERENCE          EFFECT
                                                           ----------          ------
<S>                                                        <C>              <C>
          Depreciation and Amortization                    $(297,723)       $ (82,290)
          Allowance for Doubtful Accounts                     90,472           29,012
          Gain on Sale of Subsidiary                          18,766            4,035
          New Jersey Net Operating Loss Carryforward         501,010           45,091
          (See Note X, Prior Page)

                                                                   JUNE 30, 2003

                                                           TEMPORARY            TAX
                                                           DIFFERENCE          EFFECT
                                                           ----------          ------

          Depreciation and Amortization                    $(241,993)       $ (70,310)
          Allowance for Doubtful Accounts                    279,913           69,742
          Gain on Sale of Subsidiary                          18,766            4,035
          New Jersey Net Operating Loss Carryforward         501,010           45,091
         (See Note X, prior page)
</TABLE>


      Able Energy, Inc., et al, open years are December 31, 2000 and June 30,
      2001, 2002 and 2003. The Company has a net operating loss carryforward of
      $2,302,315. The net operating loss expires between June 30, 2019 and 2021.

      These carryforward losses are available to offset future taxable income,
      if any. The Company's utilization of this carryforward against future
      taxable income is subject to the Company having profitable operations or
      sale of Company assets which create taxable income. For the nine months
      ended March 31, 2004 $1,561,970 of net income has been utilized against
      the net operating loss carryforward. At this time, the Company believes
      that a full valuation allowance should be provided. The component of the
      deferred tax asset as of March 31, 2004 are as follows:


          Net Operating Loss Carryforward - Tax Effect       $ 782,787
          Valuation Allowance                                 (782,787)
          Net Deferred Tax based upon Net
                                                             ----------

              Operating Loss Carryforward                    $   - 0 -
                                                             ==========


                                       21

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 8 NOTE RECEIVABLE - SUBSIDIARY

      The Company has a Note Receivable from PriceEnergy.Com, Inc. for advances
      made in the development of the business, including hardware and software
      costs. All of PriceEnergy.Com, Inc.'s assets are pledged as collateral to
      Able Energy, Inc. The amount of the note is $1,350,000 dated November 1,
      2000 with interest at 8% per annum payable quarterly. Principal payments
      to begin two years after the date of the Note, November 1, 2002. Through
      March 31, 2004, no principal has been paid. No interest was accrued for
      the nine months ended March 31, 2004 or the six months ended June 30, 2003
      as the note is non performing. Unpaid accrued interest due through June
      30, 2003 is $234,000. The Note and accrued interest have been eliminated
      in the consolidated financial statements (See Notes 1 and 13). Able Oil
      Company has a Note Receivable originally dated September 30, 2002 in the
      amount of $1,510,372.73 from PriceEnergy.Com, Inc. The Note has been
      updated for transactions resulting in a balance of $2,029,878 with
      interest at 8% per annum, to be paid quarterly. Principal payments to
      begin one year after date of Note, October 1, 2003, and continue monthly
      thereafter. The Note is the result of the transference of the unpaid
      accounts receivable which resulted from the sale of heating oil through
      PriceEnergy.Com, Inc. Able Oil Company has a second position as collateral
      in all of the assets of PriceEnergy.Com, Inc. to Able Energy, Inc. No
      interest has been recorded for the nine months ended March 31, 2004. Any
      payments will go to pay principal. The note receivable and accrued
      interest have been eliminated in consolidation against the amounts on
      PriceEnergy.Com, Inc.

NOTE 9 PROFIT SHARING PLAN

      Effective January 1, 1997, Able Oil Company established a Qualified Profit
      Sharing Plan under Internal Revenue Code Section 401-K. The Company
      matches 25% of qualified employee contributions. The expense was $19,945
      (2004) and $18,219 (2003), for the nine months ended March 31.

NOTE 10 COMMITMENTS AND CONTINGENCIES

      The Company is subject to laws and regulations relating to the protection
      of the environment. While it is not possible to quantify with certainty
      the potential impact of actions regarding environmental matters, in the
      opinion of management, compliance with the present environmental
      protection laws will not have a material adverse effect on the financial
      condition, competitive position, or capital expenditures of the Company.

      In accordance with the agreement on the purchase of the property on Route
      46, Rockaway, New Jersey by Able Energy Terminal, LLC, the purchaser shall
      commence after the closing, the investigation and remediation of the
      property and any hazardous substances emanating from the property in order
      to obtain a No Further Action letter from the New Jersey Department of
      Environmental Protection (NJDEP). The purchaser will also pursue recovery
      of all costs and damages related thereto in the lawsuit by the seller
      against a former tenant on the purchased property. Purchaser will assume
      all responsibility and direction for the lawsuit, subject to the sharing
      of any recoveries from the lawsuit with the seller, 50-50.


                                       22

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 10 COMMITMENTS AND CONTINGENCIES (CONT'D)

      The seller by reduction of its mortgage will pay costs related to the
      above up to $250,000 (see Note 6). A settlement has been achieved by the
      Company with regard to the lawsuit. The settlement provides for a lump sum
      payment of $397,500 from the defendants to the Company. In return, the
      defendants received a release from the Estate (the Seller) and a release
      and indemnification from the Company. The defendants provided a release to
      Able Energy and the Estate. Pursuant to the original agreement, the Estate
      receives 50% of the settlement amount, net of attorney fees.

      This has been amended by an agreement dated November 5, 2001. The entire
      settlement, net of attorney fees, was collected and placed in an
      attorney's escrow account for payment of all investigation and remediation
      costs. Able Energy Terminal, LLC has incurred costs of $102,956 to March
      31, 2004, which are included in Prepaid Expenses and must be presented to
      the attorney for reimbursement. Per management, certain items such as a
      performance bond are being finalized, then reimbursement can be made.

      The costs of the cleanup pursuant to the Agreement of Sale must be shared
      equally (50/50) by the seller and purchaser up to Seller's cap of
      $250,000. Seller's contribution to the cleanup is in the form of a
      reduction to the Note and not by direct payments. In the opinion of
      management, the Company will not sustain costs in this matter which will
      have a material adverse effect on its financial condition.

      Following an explosion and fire that occurred at the Able Energy Facility
      in Newton, NJ on March 14, 2003, and through the subsequent clean up
      efforts, Able Energy has cooperated fully with all local, state and
      federal agencies in their investigations into the cause of this accident.

      On April 2, 2003, Able Energy received a Notice Of Violation from the New
      Jersey Department of Community Affairs ("DCA") citing a total of 13
      violations to the New Jersey Administrative Code, Liquefied Petroleum Gas.
      Twelve of the violations were assessed a penalty of $500 each. One of the
      violations, regarding the liquid transfer from one truck to another truck,
      was assessed a penalty of $408,000, a second notice was received on April
      29, 2003, for an alleged violation on April 12, 2003, and a fine of $5,500
      was assessed for a total of $419,500. This amount is included in accrued
      expenses at June 30. (See below)

      Based upon initial review, the company disagrees with many of the findings
      of the report and disputes many of the allegations. The company has
      contested the DCA Notice of Violation and the assessed penalties. Counsel
      and the DCA have had several meetings and hearings were held in the Office
      of Administrative Law. The Company and DCA have settled the penalties of
      $419,500 for $25,000, resulting in Other Income of $394,500 (See Note 22).
      The $25,000 was paid March 10, 2004.


                                       23

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 10 COMMITMENTS AND CONTINGENCIES (CONT'D)

      Company personnel met with personnel of the United States Occupational
      Safety and Health Administration ("OSHA") on September 12, 2003. OSHA has
      conducted an investigation relating to the safety practices of the
      Company, including such practices relating to the March14, 2003 explosion
      and fire. OSHA has informed the Company it will be assessed a penalty of
      $16,000 based upon violations sited. This amount is included in Accrued
      Expenses at June 30, 2003. This amount was paid in October 2003.

      The Sussex County, New Jersey, Prosecutor's Office is conducting and
      investigation as a result of the March 14, 2003 explosion and fire. No
      determination has been made with respect to its investigation.

      A lawsuit has been filed against the Company by property owners who
      allegedly suffered property damages as a result of the March 14, 2003
      explosion and fire. The Company's insurance carrier is defending as
      related to compensatory damages. Legal counsel is defending on the
      punitive damage claim. A hearing was held on March 11, 2004 on an
      application on certain matters by the Plaintiffs, which were denied. Per
      legal counsel, in their opinion, the matter will not be certified as a
      Class Action.

      As a result of the March 14, 2003 explosion and fire, various claims for
      property damage have been submitted to the Company's insurance carrier.
      These claims are presently being handled and, in many cases, settled by
      the insurance carrier's adjuster. There are approximately 200 claims being
      handled and adjusted with reserves for losses established as deemed
      appropriate by the insurance carrier.

      The Company in the normal course of business has been involved in law
      suits. Current suits are being defended by the insurance carrier and
      should be covered by insurance.

NOTE 11 OPERATING LEASE

      Able Energy Terminal, LLC, has acquired the following lease on the
      property it purchased on Route 46 in Rockaway, New Jersey.

      The lease with Able Oil Company, a wholly owned subsidiary of Able Energy,
      Inc., has an expiration date of July 31, 2004. The lease provides for a
      monthly payment of $1,200 plus a one cent per gallon through put, as per a
      monthly rack meter reading.

      Estimated future rents are $14,400 per year, plus the one cent per gallon
      through put charges per the monthly rack meter readings.

      The Company leased 9,800 square feet in the Rockaway Business Centre on
      Green Pond Road in Rockaway, New Jersey. The facility will be used as a
      call center and will combine the administrative operations in New Jersey
      in one facility. The lease has a term of five (5) years from August 1,
      2000 through July 31, 2005.


                                       24

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004

NOTE 11 OPERATING LEASE (CONT'D)

      The rent for the first year is $7,145.83 per month and the second through
      fifth year is $7,431.67 per month, plus 20.5% of the building's annual
      operational costs and it's portion of utilities. The current monthly rent,
      including Common Area Charges, is $9,799.04 per month.

      The lease does not contain any option for renewal. The rent expense was
      $110,342 for the nine months ended March 31, 2004. The estimated future
      rents are as follows:

             YEAR ENDED JUNE 30,


                     2004                                   $  29,397
                     2005                                     117,588
                     July 2005                                  9,799
                                                            ---------
                              TOTAL                         $ 156,784
                                                            =========


      The following summarizes the month to month operating leases for the other
      subsidiaries:

              Able Oil Melbourne                 $500.00, per month
                                                 Total rent expense, $4,500

              Able Energy New York               $600.00, per month
                                                 Total rent expense, $5,400

NOTE 12 FRANCHISING

      The Company sells franchises permitting the operation of a franchised
      business specializing in residential and commercial sales of fuel oil,
      diesel fuel, gasoline, propane and related services. The Company will
      provide training, advertising and use of Able credit for the purchase of
      product, among other things, as specified in the Agreement. The franchisee
      has an option to sell the business back to the Company after two (2) years
      of operations for a price calculated per the Agreement.

      The Company signed its first franchise agreement in September 2000. On
      June 29, 2001, PriceEnergy.Com Franchising, LLC, a subsidiary, signed its
      first franchise agreement. The franchisee will operate a B-franchised
      business, using the proprietary marks and a license from PriceEnergy.Com,
      Inc. and will establish the presence of the franchisee's company on the
      PriceEnergy Internet Website. The franchisee will have the exclusive
      territory of Fairfield County, Connecticut as designated in the agreement.
      No new franchise agreements have been signed.


                                       25

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 13 RELATED PARTY TRANSACTIONS

      $44,690 is due from the major Shareholder/Officer of the Company. This
      amount is evidenced by a Note bearing interest at a rate of 6% between the
      Shareholder and the Company. This Shareholder has loaned the Company a
      total of $380,000 as of June 30, 2003, as evidenced by a Demand Note with
      interest at 6% per annum, which can be paid all or in part at any time
      without penalty. The Shareholder was repaid $135,000 on March 3, 2004 (See
      Note 22). The balance of the Note was paid in March 2004. Interest expense
      has been paid in the amount of $13,033. In relation to the payment of this
      Note, the Shareholder has a liability to the Company of $16,840.

      The following officers of this Company own stock in the subsidiary,
      PriceEnergy.Com, Inc., which they incorporated in November 1999.

                   Chief Executive Officer                     23.5%
                   President                                    3.6%

      No capital contributions have been made by these officers (See Notes 1
      and 8).

NOTE 14 EARNINGS PER SHARE

      The shares used in the computation of the Company's basic and diluted
      Earnings Per Common Share are as follows:


                                                     MARCH 31,        MARCH 31,
                                                       2004             2003
                                                       ----             ----
          Weighted Average of Common
            Shares Outstanding Used in Basic
               Earnings Per Share                    2,013,250       2,009,814
          Dilutive Effect of:
              Employee Stock Options                    27,338          42,937
              Stock Warrants                                --              --
                                                     ---------       ---------
          Weighted Average Common Shares
            Outstanding Used in Diluted
                Earnings Per Share                   2,040,588       2,052,751
                                                     =========       =========


      Weighted average common shares outstanding, assuming dilution, includes
      the incremental shares that would be issued upon the assumed exercise of
      stock options, and stock warrants. For 2003, approximately 389,000 of the
      company's stock options and stock warrants were excluded from the
      calculation of diluted earnings per share because their inclusion would
      have been anti-diluted, 335,183 (2002). These options and warrants could
      be dilutive in the future. The numerator for the calculation of both basic
      and diluted earnings per share is the earnings or loss available for
      common stockholders. The above table shows the denominator for basic and
      diluted earnings per share.


                                       26

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 15 STOCK OPTION PLANS

      The Company has stock option plans under which stock options may be issued
      to officers, key employees, and non-employee directors to purchase shares
      of the Company's authorized but unissued common stock. The Company also
      has a stock option plan under which stock options may be granted to
      employees and officers.

      Options granted currently expire no later than 3 to 5 years from the grant
      and have vesting periods from none to 25% at grant and 25% each
      anniversary.


                                                             OUTSTANDING OPTIONS
                           NUMBER OF SHARES   EXERCISE PRICE        TERM
                           ----------------   --------------        ----

          January 6, 2000
             Grants               56,000        $   5.00           5 years
             Exercises                 0

          December 21, 2000
             Grants               60,000        $   1.80           5 years
             Exercises                 0

             Grants               23,000        $   2.25           5 years
             Exercises                 0

          October 22, 2002
             Grants               50,000        $   3.00           5 years
             Exercises                 0


NOTE 16 STOCK WARRANTS

      The Company has issued stock warrants as follows:

C.    60,000 Common Stock Purchase Warrants at $4.81 per share, effective August
      31, 2000, and expiring August 31, 2005, to Andrew Alexander Wise & Company
      in connection with an investment banking advisory agreement with the
      Company, dated July 1, 2000.

C.    40,000 Common Stock Purchase Warrants at $4.00 per share, effective June
      26, 2001 and expiring June 26, 2004, in connection with a $500,000 Note
      Payable (See Note 5). These warrants have not been registered under the
      Securities Act of 1933.

C.    100,000 Common Stock Purchase Warrants at $4.00 per share, effective
      September 13, 2002, and expiring September 13, 2004, in connection with a
      $750,000 Note Payable (see Note 5).


                                       27

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 16 STOCK WARRANTS

      The 200,000 warrants to purchase shares of common stock were outstanding
      during the first quarter of 2004 and were not included in the computation
      of diluted EPS as the warrants' were all higher than the average stock
      price of $2.87 and would have been anti-diluted (See Note 14). These
      warrants have not been registered under the Securities Act of 1933.

NOTE 17 COMPENSATED ABSENCES

      There has been no liability accrued for compensated absences; as in
      accordance with Company policy, all compensated absences, accrued vacation
      and sick payment must be used by December 31st. At March 31, 2004, any
      amount for accrual of the above is not material and has not been computed.

NOTE 18 CASH FLOW INFORMATION

      The Directors received Common Stock as payment of Directors' Fees,
      $24,000, in the quarter ended September 30, 2002. No cash was received or
      paid. Upon the sale of the subsidiary on March 1, 2004, $1,400,000 is a
      receivable and has no effect on cash.

NOTE 19 INSURANCE CLAIM

      The Company suffered a loss on March 14, 2003 of a building, trucks,
      leasehold improvements, product inventory and equipment as well as cost of
      cleanup and restoration. The Company has filed an insurance claim. The
      insurance adjusters are in the process of finalizing the amounts to be
      paid to the Company. The estimated costs not reimbursed are $544,902 and
      is currently shown as deferred costs insurance claims on the balance
      sheet. Management anticipates the insurance recovery will cover the
      company costs. A claim for business interruption still has to be filed.
      The following is a summary of insurance claims filed:

           Building (commercial property)          $349,526

           Paid by March 31, 2004                   349,526
                                                   --------

           Contents                                $337,617
           Paid by March 31, 2004                   319,332       $ 18,285
                                                   --------

           Vehicles                                $302,674
           Paid by March 31, 2004                   247,409         55,265
                        Total                                     $ 73,550
                                                                  ========

      The above amounts were submitted as claims but do not represent a
      settlement with the insurance carriers.


                                       28

<PAGE>

                       ABLE ENERGY, INC. AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)
                        JUNE 30, 2003 AND MARCH 31, 2004


NOTE 20 BUSINESS SEGMENT INFORMATION

      The Company does not have separate operating financial segments. The
      financial information is evaluated on a company wide basis. As such, no
      segment reporting is prepared for internal use.

NOTE 21 RECLASSIFICATION

      The Company has entered into a financing agreement with UPS Capital
      Business Credit, that permits the Company to borrow a $4,300,000 term
      loan, payable over fifteen (15) years. The loan closed on September 22,
      2003 (see Note 4). The Company used the funds in part to repay short-term
      debt of $3,170,000, a bank loan of $1,270,000 and other Notes totaling
      $1,900,000. In accordance with Financial Accounting Standards Board FAS6,
      the refinanced short-term debt at June 30, 2003, has been reclassified to
      long-term as "Short-Term Debt Refinanced".

NOTE 22 SALE OF SUBSIDIARY

      On March 1, 2004, the Company sold its subsidiary , Able Propane, LLC. The
      Sale was a sale of inventory and equipment (the operating assets of the
      subsidiary). The total price of the sale was $4,400,000. Of that,
      $3,000,000 was received in cash and was used as a reduction of long-term
      debt in the amount of $1,284,737. There was also payment of $135,000 of
      Officer Loan and $325,000 of Legal Fees. The Company had a cash increase
      of $1,255,268.

      In conjunction with the sale of the propane business, the New Jersey Dept.
      of Community Affairs (DCA) reduced the fine that was charged of $419,500
      to $25,000 and the reduction of $394,500 is shown as Other Income. The
      $419,500 had been deducted as an expense in the prior fiscal year ended
      June 30, 2003 (See Note 10).

      The Company received a Note receivable for $500,000, principal balance of
      this Note payable in full on the fourth anniversary of the closing, March
      1, 2008. The Note bears interest at 6% per annum ($30,000 per year),
      payable quarterly within 45 days of the closing of each fiscal quarter.

      The Company also has signed a non-competition agreement and will receive a
      total payment of $900,000, payable in $225,000 installments due one, two,
      three and four years from the date of closing.

      The Company will receive the accounts receivable due 60 days or less as
      follows: Current 100%, 30 days 95% and 60 days 85%. Within 30 days
      following closing, the Company is due approximately $124,586 from the
      buyer, $208,917 of accounts receivable have been paid. Accounts 90 days
      and greater, if collected, go to the buyer, which is approximately
      $42,000.


                                       29

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

      ABLE ENERGY, INC. AND SUBSIDIARIES

      Statements in this Quarterly Report on Form 10-Q concerning the Company's
      outlook or future economic performance, anticipated profitability, gross
      billings, expenses or other financial items, and statements concerning
      assumptions made or exceptions to any future events, conditions,
      performance or other matters are "forward looking statements," as that
      term is defined under the Federal Securities Laws. Forward-looking
      statements are subject to risks, uncertainties, and other factors that
      would cause actual results to differ materially from those stated in such
      statements. Such risks, and uncertainties and factors include, but are not
      limited to: (i) changes in external competitive market factors or trends
      in the Company's results of operation; (ii) unanticipated working capital
      or other cash requirements and (iii) changes in the Company's business
      strategy or an inability to execute its competitive factors that may
      prevent the Company from competing successfully in the marketplace.

      REVENUE RECOGNITION

      Sales of fuel and heating equipment are recognized at the time of delivery
      to the customer, and sales of equipment are recognized at the time of
      installation. Revenue from repairs and maintenance service is recognized
      upon completion of the service. Payments received from customers for
      heating equipment service contracts are deferred and amortized into income
      over the term of the respective service contracts, on a straight-line
      basis, which generally do not exceed one year.

      RESULTS OF OPERATIONS

      NINE MONTHS ENDED MARCH 31, 2004, COMPARED TO THE NINE MONTHS ENDED MARCH
      31, 2003.

      The Company reported revenues of $36,772,902 for the nine months ended
      March 31, 2004, a decrease of 3.68% over the prior year's revenues for the
      same nine-month period. The sales decreased by $1,401,749. A higher
      commodity cost during this past season due to economic unrest, and the
      fear that war could disrupt the world's oil supply also impacted revenues.
      The Company did not have use of its facility in Newton, New Jersey, due to
      the explosion in March 2003, which affected its deliveries to Sussex and
      Warren Counties in New Jersey.

      Gross profit margin, as a percentage of revenues, for the nine months
      ended March 31, 2004, vs. 2003 decreased by 3.36% or $1,490,929. The
      decrease in margin was the result of the dramatically rising product costs
      during the months of October, November and December. Retail pricing was
      adjusted appropriately to cover most of the increases while continuing to
      maintain the company's competitive position in the marketplace.

      Selling, General, and Administrative expenses, as a percent of sales,
      increased by 2.77% from 10.94% in nine months ending March 31,2003 to
      13.71% during the same period in 2004. There were increases in payroll,
      advertising, vehicle repair and maintenance, bank charges, interest
      expense, a write-off of uncollectable accounts and an increase in
      insurance costs due to the unsettled insurance market. Management will
      continue to monitor the fiscal budget against actual results on an ongoing
      basis and strengthen its efforts to reduce SG&A as a percentage of sales.

      Operating loss for the nine months ended March 31, 2004 was $(524,595) as
      compared to the Company's income of $1,870,412 for the nine months ended
      March 31, 2003. This operating loss for nine months was directly related
      to the increase in operating costs and lower gross profit.

<PAGE>


      Net income for the nine months ended March 31, 2004 was $1,366,130 as
      compared to the same period for the previous year of $1,275,747. This net
      income in 2004 was the result of the sale of the propane operation of Able
      Propane, LLC, a subsidiary, at a gain of $2,668,490.

      OPERATIONAL EFFICIENCIES

      The Company is continuing to evaluate several alternatives to increase the
      utilization of existing personnel and equipment, to reduce expenses and
      increase profitability, within its current business configuration. Since
      the March 14th 2003 explosion at its Newton, New Jersey fuel distribution
      facility, the company is operating the business of its main subsidiary,
      Able Oil Co. out of its Rockaway, New Jersey site. This has caused an
      increase in operating costs due to increased travel distances for the
      service and delivery vehicles. The company is currently seeking approval,
      via appeal to Superior Court in Morris County, to rebuild at the Newton
      site (Sussex County). The Company is also looking at several additional
      locations within Sussex County as an alternative. These options are being
      weighed to reduce expense and increase efficiency.

      The Company believes that there is value to the products and services that
      it provides to its consumers in varying levels based upon the specific
      needs of the consumer and the products provided. Gross margins for the
      period October 2003 to March 2004 were temporarily lower due to a dramatic
      rise in the cost of distillates, and the company believes that its margin
      strategy is working and has been expanded to include equipment sales and
      services. During this current fiscal year, the Company began marketing
      discounted heating oil sales under the name of Able Oil Express. The full
      service heating oil deliveries including a full line of HVAC service
      continues to be operated under the trade name of Able Energy. This
      distinctive strategy was put into place to differentiate the Company's
      full service business from its sales of discounted heating oil as a
      further step in Able's margin management strategy.

      In October of 2003, the Company began billing for its in-home heating
      repairs utilizing a methodology known as "Flat Rate Pricing", an approach
      similar to that used in the automobile repair field. Flat Rate Pricing is
      being introduced in stages with the first phase having been introduced in
      October. This system gives the Company's sales and service personnel the
      ability to offer the customer an easy to understand, "package approach" to
      repairs and equipment installations with one or two line billings per
      invoice. This system will interface with the Company's automated dispatch
      communications program that was introduced last year. It is anticipated
      that this system will be fully implemented by the end of the current
      fiscal year.

      OPERATING SUBSIDIARY

      The Company's operating subsidiary, PriceEnergy with its modern
      order-processing platform is now in its third full year of operation. The
      revolutionary proprietary technology that is used to power the PriceEnergy
      platform is fully automated and allows for the removal of the
      inefficiencies associated with a traditional heating oil company in this
      industry. PriceEnergy has generated almost 4 million gallons in new
      business this year, which was delivered by its dealer network. In December
      2002, PriceEnergy began sales of Home Heating Oil in two BJ's Wholesale
      Club stores in the Northeast. Since the introduction of home heating oil
      sales in the initial two stores, heating oil sales are now being offered
      in over 50 BJ's Wholesale Club stores and being delivered by a network of
      over 50 independent dealers in 8 states. The Company is enthused about the
      growth with its new "Channel Partner", BJ's and looks for further sales
      gains as the occasion to sell in other retail venues materialize.

<PAGE>


      EXPLOSION AND FIRE

      On March 14, 2003, Able Energy experienced and explosion and fire at its
      Newton, New Jersey facility which resulted in the destruction of an office
      building on the site, as well as damage to 18 Company vehicles as well as
      some neighboring properties. Fortunately, due to the immediate response by
      employees at this location, a quick evacuation of all personnel occurred
      prior to the explosion, preventing any serious injuries.

      The results of the investigations done by the Company as well as local
      officials, OSHA, and the New Jersey Department of Community Affairs,
      indicted that the explosion was an accident that occurred as a result of a
      combination of human error, mechanical malfunction, as well as the failure
      to follow prescribed state standards and company policy for propane
      delivery truck loading. On April 3, 2003, Able Energy received a Notice of
      Violation from the New Jersey Department of Community Affairs. The dollar
      amount of the assessed penalty totaled $414,000. Later in April of 2003,
      Able Energy received a subsequent fine in the amount of $5,500. Able
      Energy contested the Notices of Violation and ultimately settled with the
      Department of Community Affairs via a "global settlement" which was
      arrived at earlier this year. The settlement resulted in the sale of the
      operating subsidiary, Able Propane, Co. LLC, and the reduction of the
      fines and penalties to the Department of Community Affairs down to
      $25,000.

      Able Energy worked closely and cooperated fully with the investigations
      conducted by all federal, state, and local officials since the accident.
      Strict and clear employee communications have taken place to reinforce
      compliance with all governmental regulations as well as all company
      policies regarding the safe and proper handling of all hazardous
      materials. Training will be ongoing and will upgrade employee training to
      the most modern and up-to-date levels as well as reinforce Able Energy's
      commitment to operate all aspects of the company in a professional,
      responsible, and safe manner.

      The Company is not currently conducting operations at its Newton, New
      Jersey facility while it appeals the Newton Board of Adjustment's decision
      to deny operations at this location. The company is also contesting the
      adoption of the zoning ordinance, which changed the zoning to a
      non-permitted use. In the meantime, company operations have continued
      throughout the aftermath of the incident using its main distribution
      facility in Rockaway, New Jersey. While these arrangements permit the
      company to continue to operate, greater efficiency and customer service
      will be achieved by a location in the Sussex County area, as the Company
      believes that its Newton facility is crucial to its future operations,
      especially during the winter heating season. The company is currently
      diligently working, through appeal to the Superior Court in Morris County,
      to obtain approval to resume its core heating oil operations at the Newton
      site.

      RECENTLY IMPLEMENTED TECHNOLOGICAL MEASURES

      The Company has established goals, which will be accomplished through the
      implementation of some modern technologies that are currently being
      installed into the Company's existing infrastructure.

      The Company began introducing additional customer service technology to
      its Rockaway Call and Administrative Center during the prior fiscal year.
      Management believes that by providing enhancements to existing telephony
      hardware and in-house equipment, the Company's call center environment
      will be provided with the ability to respond to changing call patterns,
      both higher and lower, without the expense of clerical overstaffing to
      meet unrealized needs. New software now provides customers with the option
      of placing an order via a voice activated technology. This new feature
      lets customers who simply wish to refill their fuel tank, the opportunity
      to quickly place an order 24 hours a day without the help of a live
      customer service representative. This unique technology was developed by a
      voice recognition company called Votara and integrated into the Able call
      center via a unique cost sharing agreement between both companies.

<PAGE>


      The Company is continuing to fully implement an automated dispatch
      technology into the service sector of Able's HVAC business. This system
      provides management with the ability to communicate with all service and
      installation personnel instantaneously. This system will also perform
      billing functions at the customer's location as well as immediately
      documenting payment data. Management will be aware of the status of every
      on-duty worker and be able to obtain real time reporting for stand-by,
      en-route, and service work time. This system, when fully implemented, will
      enable the Company to maximize scheduling opportunities and eliminate
      service technician down time. Unfortunately, much of the automated
      dispatch hardware and system was destroyed at the time of the explosion
      and fire in the Newton location in March of 2003. This system is currently
      in the process of being restored and should be fully functional during the
      next fiscal year.

      The Company is now beginning full implementation of the recently announced
      automated dispatch technology, which provides management with the ability
      to communicate with service technicians instantaneously. This system also
      is now performing billing functions at the customer's location as well as
      documenting payment data instantaneously. Additionally, management is now
      aware of the status of every on-duty worker and obtains real time
      reporting for stand-by, en route, and service work time. This enables the
      Company to maximize scheduling opportunities and eliminating service
      technician down time.

      LIQUIDITY AND CAPITAL RESOURCES

      For the nine months ended March 31, 2004, compared to the nine months
      ended March 31, 2003, the Company's cash position increased by $1,154,670
      from $11,890 to $1,166,560. For the year ended June 30, 2003, cash was
      generated through loans, one from a private company of $750,000 and
      officer loan in excess of $300,000. In the quarter ending March 31, 2004,
      the Company sold the propane operation of a subsidiary, Able Propane, LLC,
      generating $3 million in cash, plus $1.4 million to be received in the
      future. The Company also paid debts and other costs of an excess of $2.4
      million. The Company will continue to grow its primary operation by
      aggressively marketing the sale of #2 Heating Oil and diesel fuels as well
      as its HVAC services, while strengthening its infrastructures. The Company
      is also exploring other avenues of debt or equity financing.

      SEASONALITY

      The Company's operations are subject to seasonal fluctuations, with a
      majority of the Company's business occurring in the late fall and winter
      months. Approximately 70% of the Company's revenues are earned and
      received from October through March, most of such revenues are derived
      from the sale of home heating products, primarily home heating oil.
      However the seasonality of the Company's business is offset, in part, by
      an increase in revenues from the sale of HVAC products and services,
      diesel and gasoline fuels during the spring and summer months, due to the
      increased use of automobiles and construction apparatus.

      From May through September, Able Oil can experience considerable reduction
      of retail heating oil sales.

      Over 90% of Able Melbourne's revenues are derived from the sale of diesel
      fuel for construction vehicles, and commercial and recreational sea-going
      vessels during Florida's fishing season, which begins in April and ends in
      November. Only a small percentage of Able Melbourne's revenues are derived
      from the sale of home heating fuel. Most of these sales occur from
      December through March, Florida's cooler months.

<PAGE>


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

      As of March 31, 2004, an evaluation was performed under the supervision
and with the participation of the Company's management, including the Principal
Executive Officer and the Principal Accounting Officer, of the effectiveness of
the design and operation of the Company's disclosure controls and procedures.
Based on that evaluation, the Company's management, including the Principal
Executive Officer and the Principal Accounting Officer, concluded that the
Company's disclosure controls and procedures were effective as of March 31,
2004. There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to March 31, 2004.




<PAGE>


                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      (a)   Exhibits

            31.1  Certification by Chief Executive Officer pursuant to
                  Sarbanes-Oxley Section 302

            31.2  Certification by Chief Financial Officer pursuant to
                  Sarbanes-Oxley Section 302

            32.1  Certification by Chief Executive Officer pursuant to 18 U.S.C.
                  Section 1350

            32.2  Certification by Chief Financial Officer pursuant to 18 U.S.C.
                  Section 1350

      (b)   Reports on Form 8-K

DATE OF REPORT   ITEM REPORTED ON

March 16, 2004   On March 1, 2004, Able Energy, Inc (the "Company"), Able
                 Propane Co., LLC ("Able Propane"), Chris Westad, Timothy
                 Harrington, Action Gas Propane Operations, LLC and Liberty
                 Propane, L.P. executed an Asset Purchase Agreement for the
                 sale of all of the assets of Able Propane. The assets
                 included various size tanks and delivery trucks ("Assets").
                 The aggregate purchase price for the Assets was $4,400,000,
                 which includes a $500,000 promissory note and $900,000 in
                 future payments in consideration for non-compete agreements.
                 The purchase price was determined by an arms length third
                 party negotiation between the parties



<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on this 16th day of May 2004.


                                        ABLE ENERGY, INC.

                                        /s/ Timothy Harrington
                                        ---------------------------------
                                        Timothy Harrington, Chief
                                        Executive Officer, Secretary, and
                                        Chairman


                                        /s/ Christopher P. Westad
                                        ---------------------------------
                                        Christopher P. Westad, President,
                                        Chief Financial Officer, and Director