Janesville41°

With gas at milestone, drivers feeling increasingly squeezed

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ADAM SCHRECK
April 22, 2008
— Cabbies here complain their take-home pay is thinner than it used to be. Trucking companies across the country are making drivers slow down to conserve fuel. Filling station owners plead that really, really, the skyrocketing prices aren’t their fault.

And the rest of us? With gas prices now averaging $3.50 a gallon nationwide, according to AAA and the Oil Price Information Service, more and more Americans who have to drive are weighing the need for each and every trip.


“To get to the doctors and all that, it’s an awful lot of money,” said Carol Licata, a 75-year-old retiree from Arnold, Pa., who said a larger portion of her fixed income is now going toward gas. “I don’t drive that often, but have to take necessary trips ... and (gas) takes a big chunk out of our budget.”


Some would-be drivers are considering less energy-dependent alternatives simply for money’s sake.


In Los Angeles, for example, fiction writer Brian Edwards sold his gas-guzzling Ford truck and now relies on his skateboard or the bus to get around. Sharon Cooper of Chicago, meanwhile, said she is planning to buy a bicycle to use on her 2½-mile commute to work.


And everyone, it seems, is more than willing to join in the griping.


“It’s hell,” said legal aide Zebib Yemane, who spent $5 on gas for her Chevy compact at a 76 station in downtown Los Angeles just so she could make it to a cheaper gas station east of the area.


“When going downhill, I used to step on the gas. Now I don’t,” said Yemane, who said she normally spends $80 a week on fuel and asks people for rides and takes the bus to save money.


“Bottom line, we can’t afford it no more, man. It’s too much,” Bak Zoumane said as he filled up his yellow cab at a BP station in midtown New York. The West African immigrant said his next car will likely be a hybrid so he won’t have to pay so much at the pump.


Gasoline prices typically rise in the spring as stations switch over to pricier summer-grade fuel and demand picks up as more travelers take to the road.


But this year prices are rising even faster than normal, experts say, because of the massive jump in benchmark crude prices, which spiked to a record $117.76 a barrel Monday before settling a record settlement price of $117.48 on the New York Mercantile Exchange, up 79 cents from the previous close. It was the sixth day in a row prices set new records.


Those soaring prices are putting added strain on refiners and filling-station operators, which are struggling to pass the higher feedstock costs onto consumers. So even as drivers pay more, retailers — the most public face of the oil business — are getting increasingly squeezed.


“The farther you get from the wellhead, the greater the misery,” said Tom Kloza of the Oil Price Information Service in Wall, N.J. “There’s a lot of stations across the country that are literally on the brink of bankruptcy.”


Samer Katib, the manager of a Marathon station in Chicago, said business has fallen at least 30 percent this year because customers are cutting back on driving and only using their cars when absolutely necessary.


“It’s just go to your work and go home,” he said of people’s driving habits these days, adding that customers no longer stop in for profit-fattening drinks like they used to. “They need all their money for gas,” he said.


“I wish I could make gas prices cheaper,” Katib added. “But if we do that, we cannot survive.”


Other businesses are getting pinched as well.


Mitch Goldstone, who owns a photo-scanning shop in Irvine, Calif., said he began giving out gas cards Monday to encourage people to shop after noticing a sharp decline in customer traffic — something he attributed to soaring gas prices.


AAA figures show California has higher prices than anywhere in the country, with regular now selling for an average of $3.86 a gallon.


“It’s a mess here,” Goldstone said. “People just are not shopping and everyone’s trying to figure out a way to get people back in their cars.”


Diesel prices are rising even higher than gasoline, putting pressure on trucking and other shipping companies that use the fuel to transport goods around the country.


The American Trucking Associations on Monday said it will host a “fuel strategies workshop” in June to help fleet operators cope with soaring prices.


ATA Chief Economist Bob Costello said fuel has now surpassed labor as the trucking industry’s biggest cost, prompting some companies to install devices that prevent drivers from speeding. Companies are also shelling out for auxiliary power units and offering bonuses to drivers who cut down on idling and operate their trucks more efficiently.


“Every little bit helps,” he said.



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