Higher gas prices mean other costs rise, owners say

Gasoline prices are expected to increase again this spring and summer.
By MARALINE KUBIK
VINDICATOR STAFF WRITER
YOUNGSTOWN -- Rising prices at the gasoline pump won't just hit consumers in the tank; they'll also hit them at home and work.
Prices for everything from carpet cleaning and snow removal to flowers will spike, according to local business owners who say transportation and fuel take such a big bite of their budgets already that an increase would force them to raise their rates -- some, substantially.
"Right now, gasoline is our biggest expense except for labor. It even exceeds the depreciation of our vehicles and the cost of chemicals," said Gerry Bertin, owner of Gerry Bertin Carpet & amp; Furniture Cleaning, Canfield.
When gas prices went up in the summer of 2000, Bertin said chemical suppliers hit him with a surcharge on the shipment of cleaners. Since then, he said, the suppliers have increased their rates for freight 33 percent.
Left with no choice
If prices for gasoline this summer hit all-time highs, as some experts predict, Bertin said he'll have no choice but to raise his rates and minimum-service fee.
The current minimum fee is $50. Rates for service vary according to the number of rooms cleaned.
"We're getting a double whammy," he said. "If our truck engine isn't running while we're cleaning, we have to run a pony engine that operates our truck-mounted machines. It uses one to one-and-a-half gallons of gas per hour."
Bertin, who's been in the carpet and upholstery cleaning business 28 years, said years ago he used electric machines, which were less expensive to operate but didn't work as well. The gasoline-powered machines are 10 to 20 times more powerful and do a better job. Customers are willing to pay for that, he said.
Because he can't operate without the gas-powered machines and the trucks that carry them, Bertin said the only way he can conserve fuel is by scheduling appointments according to geographic location, serving customers in Salem and Columbiana one day and Trumbull County another.
Gasoline prices soared in mid-January to record highs for this time of year, and the highest level since last October.
Crude-oil prices
Prices for crude oil are at the highest level since just before the war in Iraq began.
Retail gasoline prices rise about 2.4 cents per gallon for every $1-a-barrel increase in the price of crude oil. If the price for crude oil remains at or near $35 a barrel, as it has been, the EIA predicts the price of gasoline will jump 10 to 12 cents a gallon by spring. More price increases are expected this summer.
A large increase in gasoline prices would be tough for Tom Cramer, owner of Cramer's Lawn Care, a Niles-based lawn service/snow removal company. "The gas increase last year really affected our profit margin," he said.
Last summer, when gas cost about $1.25 a gallon, Cramer said his trucks used about $35 in fuel every day. If prices go up significantly this summer, Cramer said, his trucks could burn up to $85 a day in gas. "I'm using $50 a day in gas at today's prices," he added. "These trucks don't run on sunshine, that's for sure."
Cramer runs three trucks to remove snow for about 30 customers, and to maintain about 50 lawns a week all summer. Each truck averages eight to 10 miles per gallon during snow-plowing season.
Looking at options
Sal Mineo, who co-owns Something New Florist, Canfield, with his brother, Joe Mineo, and sister, Anna Howells, said he would also consider raising delivery fees if gas prices soar.
Current fees are based on mileage, he said: $6 for local, $8 for farther away. A spike in fuel prices could result in an expanded scale of delivery fees, he said.
Other options would be downsizing delivery vehicles or joining a delivery co-op.
Something New runs a fleet of six cargo vans and minivans, Mineo said. He might consider replacing them with small, fuel-efficient cars if the cars were retrofitted with shelves instead of a rear seats.
Or, he said, we could meet drivers from floral shops based in nearby communities at a central location and hand off items going to recipients in those areas. In exchange, Something New would deliver items the other florists have going to recipients in the Canfield area.
An increase in fuel prices would affect consumers in a similar manner.
Kay Williams of North Lima couldn't downsize. She already drives a fuel-efficient Geo Prizm, which gets 32 to 35 miles per gallon. Being frugal has been a way of life, Williams said, since she lived in Great Britain where gasoline was rationed.
A teacher at Austintown Fitch High School, Williams said she'd still have to drive back and forth to work and would still drive to Illinois to visit family. But, if gas prices were too astronomical, she might consider canceling her summer vacation in Maine.
What to drive?
"I'd have to get a motorcycle," joked Joe Catullo of Boardman. He estimates that he spent $3,000 last year to refill the tank of his 1988 Ford pickup.
A construction worker, Catullo said he needs his truck for work and couldn't downsize no matter how expensive gas becomes.
James Brizzi of Campbell said he couldn't trim much from the gas he uses, either. In the winter, Brizzi said, he rarely goes anywhere other than work and uses a borrowed car which, no matter what the price of gas, is less expensive than buying another vehicle.
Brizzi drives his Ford Mustang, which gets about 20 miles a gallon, in the summer.
An unusually cold winter in the Midwest and Northeastern United States, which has drained oil inventories to the lowest level since 1975, could drive prices of gasoline up this summer, when demand increases, according to the Energy Information Administration, or EIA, the Energy Department's analytical arm.
How high prices will go is impossible to predict.
Not in 'alarmist range'
Brian Newbacher, director of public affairs for the Ohio Motorists Association, which serves AAA members in Youngstown and Cleveland, said there could be some fluctuation in prices at the pump once the refineries begin producing different blends of gasoline for spring in summer, Newbacher said, and "historically, prices go up in the summer."
However, he said, "they won't get anywhere near as high as some alarmists are saying, but I don't think we've seen the highest prices yet."
Although Newbacher declined to estimate how high gasoline prices might go this summer, he said the $3-a-gallon price some experts are predicting is in the "alarmist range."
If prices do rise dramatically, he said, consumers will need to address the fuel efficiency of their vehicles.
Despite being gas guzzlers, SUVs and light trucks are still top sellers, Newbacher noted. Highly efficient vehicles, such as some of the hybrid electrics (Honda Civic, VW diesel and Toyota Prius), are just beginning to make inroads with consumers, he said.
kubik@vindy.com