Pumping up the prices

Sunday, May 9, 2004

Greg Eudy has just emerged from a conversation with a complete stranger about gasoline.

He has returned to his side of the gas pump at the Bi-State Southern station on Kingshighway in Cape Girardeau to survey the damage, watching the numbers climb as unleaded fuel is pumped into his Chevrolet delivery truck at $1.74 a gallon.

"It was $1.65 just last week," he says, echoing his conversation with the stranger.

On Saturday, Bi-State was charging $1.79 a gallon.

Eudy is an independent contractor delivering goods from GLE Distributors in Jonesboro, Ill., to area Wal-Marts. He fills up in Cape Girardeau because it's actually 10 cents to 20 cents cheaper to do so here than in Illinois. Even with that out-of-state discount, about 20 percent of his weekly take-home pay goes toward fuel expenses.

"What are you going to do?" he says, smiling.

Since he deals with large retailers like Wal-Mart, Eudy said there isn't much more he can do. His dealings with bigger companies leave him with little wiggle room to increase any rates to compensate for the soaring cost of truck delivery.

With gas prices reaching record highs this spring and little hope of much reprieve this summer, a pump-side gripe between strangers is becoming much more commonplace. But most consumers, like Eudy, do little more than grit their teeth, insert their gas card, fill up and take off. They don't care that gas prices were higher in 1990 than now, if adjusted for inflation. All most drivers know is that prices are higher than they were a week ago. What they may not know is that if prices stay where they are, they could have a ripple effect on other bills.

Rebecca Summary, economics professor at Southeast Missouri State University, said that if the increase in gas prices proves to be more than a short-term problem, businesses that rely on gas for transportation of their products will be forced to raise the prices of goods to compensate. Summary said that right now, many companies that use trucks to distribute goods to retailers get by through a surcharge or fee when gas prices go up.

Mike Recker, manager of the Food Giant supermarket in Cape Girardeau, said that is the case with their suppliers. The surcharge is small enough that, like Eudy, Food Giant is absorbing that extra cost without passing it on to the consumer. But if gas prices continue their upward trend, Recker says, his store will have no choice but to increase prices.

But just because Food Giant can and Eudy's company is forced to absorb the extra cost doesn't mean that everybody can do the same. Summary said that companies working under smaller profit margins may not have that luxury.

Just behind Eudy's truck at Bi-State Southern, Mario Fulgium is filling up his Coomer's Plumbing, Heating and Air Conditioning van. He says his company has had to make some changes to accommodate the growing transportation bills.

"We're charging $25 for service calls," Fulgium says, keeping an eye on his pump dial as it spins above $40. "Service calls were $15."

In addition to the rate increase, Fulgium said that now his company rides two people per vehicle instead of every employee driving alone. He also said that they used to drive to the work site, assess the problem and go back to get the parts they needed. Now, they try to have all the parts they might need in the truck on the first trip.

Vacation costs

While local companies and consumers deal with the prices in Cape Girardeau and Jackson, travelers are dealing with even higher prices if they stay near the interstate.

At the BP station near Interstate 55 in Cape Girardeau, Roy Howard was filling up the family van for $1.86 per gallon of regular unleaded in the middle of last week. On Saturday the price was still $1.86.Howard and his family were on their way to visit relatives in Memphis, Tenn., from their home in Kansas City, Mo. Gas prices have kept their journey on more of a straight line.

"We definitely don't do as much touring around," Howard says. "We don't have quite the freedom we used to."

Howard said were it not for the fact they had family in Memphis, they wouldn't be making this trip at all.

Chuck Martin, director of the Cape Girardeau Convention and Visitors Bureau, expects that many vacationers will take a similar stance when considering trips in excess of 300 miles. But Martin said he isn't looking for gas prices to have much of a negative effect on tourism in Cape Girardeau.

"Our benefit is that we're more of a regional destination," Martin said. "I think this year more people will be working on vacations in their back yards."

Martin said that if gas prices stay where they are for much of the summer, many vacationers will go on with their trips as planned.

"The extra 40 cents a gallon really won't be that much of a deterrent," Martin said. "It's not breaking the bank."

Don't tell that to Iowan Dale Brown. He's a full-time motor home traveler who of late was parked off Highway 177 in Cape Girardeau. During his stay in the area, Brown discovered Murphy USA in Jackson, where he can fill up his RV and the car he tows behind it for $1.67. It's a price he still doesn't like. He'd like Saturday's price a little less -- $1.69.

When Brown makes his annual trek to West Plains, Mo., later this summer, he'll be 25 miles away from the nearest town. Not anxious to pay for a 50-mile round-trip grocery run, Brown is already trying figure out a way to make fewer trips for food.

In addition to this dilemma, Brown said the heightened gas cost has cut his usual RV itinerary from a handful of trips to two destinations a year. This included the elimination of his annual trip to Texas.

Then there's Greg Little of Jackson.

Little is filling up his car two pumps down from where Brown was at Murphy USA. Like many consumers, he has heard that experts expect gas prices to stay high all summer. But whatever the price is, he will continue to fill up his car to go to work at a pizza restaurant in town. He hasn't much choice, and he doesn't seem to care.

"I just go to work and not really worry about it," Little says. "I just deal with it and go on."


335-6611, extension 137

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