Gas drives prices up

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March 4, 2008

Anonymous The Joplin Globe Tue Mar 04, 2008, 08:00 AM CST

By Melissa Dunson

mdunson@joplinglobe.com

There’s good news, and then there’s the bad news.

The good news is that Missouri was one of only two states in the country with average gasoline prices under $3 a gallon Monday afternoon, according to Mike Right, vice president of public affairs for AAA.

The bad news is that it probably won’t stay that way.

The dark view of gasoline’s future is based on both crude-oil and diesel prices hitting record highs Monday.

According to Right, the same barrel of crude oil that cost Americans $60 last year cost $103 Monday. That’s a 71 percent increase. Diesel prices hit a record high national average of $3.67 a gallon Monday.

“Diesel looks like it’s headed for $4 a gallon,” Right said. “Nobody can really predict (unleaded) gasoline prices tomorrow, much less next week, but they could get there too.”

The average price Monday for regular unleaded gasoline was $2.98 in Missouri and $2.95 in the Joplin area, compared with the national average of $3.165. Right said fuel prices typically hit their highest point in the spring, when oil producers switch from winter to spring fuel, so the worst could still be on its way.

After years of regularly paying more than $2 a gallon for gas, the sticker shock at the pump has started to wear off for some consumers. Sara Terrill, of Joplin, said she has adjusted to high fuel prices by cutting down on the number of trips she makes around town.

“I don’t drive anywhere but work anymore,” she said.

But the sting also is hitting consumers in grocery stores and restaurants, as rising fuel costs are forcing business owners to pass on freight surcharges and price increases to customers. Everett Guder, of Moran, Kan., said he does everything he can to cut down on the amount of gasoline he uses, but it keeps costing him more to fill up, and now he’s feeling it at the grocery store too.

“I try to get my groceries at the same time as I’m doing something else in (Joplin),” Guder said. “I only come into town two times a week now, but it’s still too often. And now the groceries are going up too.”

‘It’s crazy’

Gayl Navarro, owner of Ozark Nursery in Joplin, said she is feeling the sting of fuel prices in nearly every area of her life. She said her shipping costs have gone up 10 percent to 15 percent over the past year because of fuel surcharges.

She said she went to a local grocery store Monday, and spent $7 on a can of tuna, a gallon of milk and two bags of pasta.

“Oh my God, it didn’t used to cost me that much,” Navarro said. “It’s crazy.”

And now, the high gas prices are affecting her future. Navarro was planning to visit a friend in San Diego, Calif., this summer, but she recently canceled the trip because she couldn’t afford it.

“I can’t believe we’ve allowed this to affect our lives,” she said. “The whole world spins around the price of a gallon of gas.”

She worries that her business will suffer this spring, when her nursery usually does its best sales, because people cut out extras such as landscaping when their budgets get tight.

“People can live without pretty, but we all need to eat,” she said.

Even eating is becoming more difficult to afford, said Mike Wiggins, owner of Granny Shaffer’s and Continental Catering in Joplin and Webb City. Wiggins said many restaurants have been absorbing increased fuel-related shipping costs without passing them on to consumers. But that can only last so long.

“It’s killing us, but we’re trying to keep our prices down,” he said.

In his last supply shipment, Wiggins said, all but five of his 100 items went up in price. Trash bags — a petroleum-based product — went up $10. His suppliers and shipping companies recently added fuel surcharges of $3.50 to $7 a truck to help make up for the added gas prices. He said he gets 20 trucks a week, and his monthly bills have gone up more than $400 because of fuel prices.

‘It would kill us’

Freight companies say they have no choice but to charge their customers the fuel surcharges. John Laughlin, a Joplin driver for Frontier Leasing Inc., spent more than $500 filling up his truck Monday. Jeff Thurman, chief financial officer for Sitton Motor Lines in Joplin, said his company has surcharge agreements with all its customers that fluctuate weekly based on the national average price of diesel.

“Surcharges have been around for a long time, but the prices have jumped up quite a bit in the last couple of weeks,” Thurman said. “It would kill us if we didn’t have them.”

Even with the surcharges, he said, fuel costs still make up 26 percent of the company’s annual expenditures. And Thurman doesn’t expect prices to go anywhere but up.

“The overall trend is up, and I don’t see that changing,” he said.

And there’s not much consumers can do, said Right, with AAA.

“There’s not much you can do except adjust your energy consumption,” he said. “And most people are already doing that. A recent poll of our members showed that people don’t want to hear about this anymore, because they’re already doing what they can, and there’s nothing left for them to do.”

Melissa Dunson is the business writer for The Joplin Globe.

The Associated Press contributed to this report.