Gas price spike worries residents, businesses

Published: September 13, 2012 

091212GAS2

Gas is shown at $3.95 at a station along University Drive, in State College, Pa., Tuesday, September 11, 2012. Nabil K. Mark

Centre Daily TimesBuy Photo

If gas prices stay near $4 per gallon in Centre County, AA Taxi might have to raise its rates for the first time ever.

The company previously added a $1 surcharge to offset gasoline prices, but regular rates never have increased, said daytime supervisor Duane Green.

“As a driver, around $4 a gallon is when it starts to get upsetting,” he said.

All over the region, businesses and consumers alike are feeling the sting of high gas prices that continue to climb. Many local pumps have reached $3.95 a gallon.

The rising costs are a function of the remnants of Hurricane Isaac, said Patrick DeHaan, Gas-buddy. com senior petroleum analyst, adding that although prices could reach $4 a gallon, he doesn’t expect a long, sustained period at that price.

DeHaan thinks the price will settle between $3.40 and $3.75 in the months to come, but rate increases and surcharges for companies could continue to plague the public.

“The rising cost of fuel now is something that’s being pushed down to the consumer,” he said.

That’s been a reality for many local businesses that rely on fleets or gasoline-powered equipment.

James Gilliland, owner of Gilliland Landscape in State College, said he is against the idea of surcharges, but he takes fuel costs into account when writing estimates — and it might raise the price for the client.

Gilliland said the higher prices could make it harder to book jobs, but he said he’s been fortunate this year to have a good amount of work.

“It definitely takes money out of our bottom line,” he said. “There’s no doubt about it.”

For John Bowman, of Orelli Supply Co., it could even mean layoffs of workers. The store manager of the State College branch of the company said it could be a big problem for the business, which delivers chemicals to restore car finishes.

“I think everyone’s concerned about it,” he said, adding that he has a 105- mile commute from Williamsport every day.

One gasoline company made national headlines when it raised its price at the pump to $8 a gallon. More than 50 Lukoil gas station and convenience store owners in Pennsylvania and New Jersey increased their prices in a one-day protest of Lukoil North America. The owners claim the parent company’s high prices create a competitive disadvantage.

DeHaan said brand-name recognition is taken into account when oil companies sell gas to retailers, and some corporations have to pay more for the product. But he said what they are doing is “great,” and it is unfair that they would have to pay more.

While automobile travel decreased in 2008 when prices eclipsed $4 per gallon, DeHaan said that most likely won’t be the case this time around — unless the price reaches $5 per gallon.

“Americans have been accustomed to high prices,” he said. “Four dollars is no longer a shock.”

But Bowman said that when he is driving his personal vehicle, he will plan out his trips more often and look to keep his gas costs as low as possible. He said he doesn’t see anyone giving up their vehicle because “that is their freedom.”

Although prices should come down soon, the long-term projections are not as positive unless vehicle fuel economy improves dramatically or alternative energy becomes more popular, DeHaan said.

If the industry norm reaches more than 50 miles per gallon, fuel prices will be slashed and consumers will be happy, he said.

Matt Morgan can be reached at 235-3928. Follow him on Twitter @MetroMattMorgan

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