Cheap oil means change in US that’s wide-ranging

Associated Press

WASHINGTON

Cheap oil doesn’t only mean cheaper gas in the tank. It means that a car dealer in Illinois is shuffling the inventory of models he’ll be selling, that more students in Wisconsin may get school-provided iPads, that some planned projects in a Southern California city will get delayed, and that some expected oilfield hiring in North Dakota and Texas may not happen.

In ways large and small, plummeting oil prices are now reverberating through businesses, towns, schools and family budgets, causing confusion and changing plans. With prices having fallen by nearly half in just six months, the potential impact has been sudden and wide ranging.

“I’m always chasing my tail,” said Ron Hicks, who has sold cars for 10 years in Galesburg, Ill., and overall for 38 years, and suddenly finds himself with too many smaller, fuel-efficient cars on his City Select lot when trucks and sports cars might sell better.

Fuel is a major cost item for many businesses and local governments, and the recent changes are upending budgets that were drafted months ago and used to plan hiring and authorize projects for 2015. For a medium-size city with police cars and garbage trucks to fuel, gasoline costs can amount to several hundred thousand dollars annually.

But oil also is a revenue source in more than two dozen states, especially for about a third of them. In Alaska, where up to 90 percent of the budget is funded by oil, new Gov. Bill Walker has ordered agency heads to start identifying spending cuts.