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Drivers, truckers, boaters, mowers share pain of $4 gas
Wednesday, June 11, 2008
David Razorsek, a sales manager of European Motorcycles, introduces a Vespa 150cc scooter to a customer yesterday at the store in Wexford. Mr. Razorsek said he sold about a scooter a day in recent months compared to 2-3 scooters a month last year.

The Pittsburgh region passed an unpleasant milestone yesterday: The average price for a gallon of unleaded gasoline hit $4 a gallon, according to AAA East Central.

If you think spending $56 to fill a 14 gallon tank hurts, try ordering gasoline by the tanker.

"When I order fuel, my supplier takes that out of my bank account the following morning," said Hugh J. Campbell, who owns the Sunoco Station on Clay Pike in North Huntingdon.

He pays for more than 32,000 gallons of gasoline at a time and if motorists pay cash, he makes between a nickel and a dime a gallon, but if they pay by credit cards in some cases the fees rack up to 16 cents a gallon -- so he loses money. The cash center of his business is an auto repair business at this site and the convenience stores at two other locations.

"The consumer talks about how much it takes to fill their tank, they should walk a mile in my shoes."

Economists also are watching the prices.

"For many people, $3 a gallon was traumatic enough and now we are up to $4 -- that's a behavior changing event," said Robert Dye, a senior economist for PNC Financial Services.

Mr. Dye said he expects to see consumers driving less, riding on public transit more and changing how they spend money to cover the increase in the cost of fuel.

The high prices are "changing consumers' behavior and automakers' behavior and oil companies' behavior."

Those changes could cause prices to drop.

"It's going to take many months for this drama to completely unfold, he said.

Diesel is worse

Truckers don't have much sympathy now that the rest of us are paying $4 for a gallon of regular unleaded. That's because they passed that psychological threshold in March -- diesel costs are now averaging more than $4.70 across the United States, with a low of $4.64 a gallon in the Midwest and a high of $5.02 a gallon in California, the country's costliest motor fuel market.

In Pennsylvania, the price was around $4.90 as of last week, which is more than double the price that truckers were paying at the beginning of 2007.

You think your $50 fill-up on a 14-gallon tank is expensive? It would cost about $1,400 to fill an empty tractor-trailer with 300 gallons of fuel capacity. Most trucks get less than 8 mpg.

"There are more and more drivers who are finding themselves having to think about their options," said Norita Taylor of Owner-Operator Independent Drivers Association, a lobbying group for truckers.

Those options include finding another job, and adding a fuel surcharge -- just like your pizza delivery guy -- to make ends meet, 60 or 70 cents per mile or more. The drivers of owner-operated trucks are generally independent contractors, and their fuel costs aren't covered by a parent company. And because some companies are cutting back on the freight they send, there's more competition for fewer jobs, meaning the prices that can be fetched for a load of freight aren't keeping up with the increasing prices for diesel.

The association estimates that 10 percent of its members have either temporarily parked their trucks, or sold their rigs.

Lawn services feeling pinch

McCreary's Budget Lawn Care in Monaca mows about 300 lawns a week and, between trucks and machinery, uses around 450 gallons of gas. Owner Shawn McCreary is feeling the pressure.

"I don't want to raise prices more than once in a season," he said.

But a 2 percent increase that went into effect in the spring is not keeping up with the cost of fuel, not to mention the cost of shrubs and fertilizer and the fuel surcharges that his suppliers are adding on.

Back when the lawn care company raised its rates, a gallon of regular ran about $3, far below the $4 level that the nation and the region have reached. "It's getting to be ridiculous," said Mr. McCreary, who is feeling fortunate that he hasn't seen a decrease in business. So far.

Over at the Lawn Doctor of Cranberry, Gibsonia and Mars, consumers are complaining about a 7 percent price increase put through earlier this year, but owner Jack Deigan doesn't think the math is working in his favor.

Since the end of 2007, not only have gas prices shot up but prices for the fertilizer he uses are up 45 percent and expected to go higher. "They're just absolutely killing us," he said.

Both lawn care service operators said they're trying to be as efficient as possible, which can mean plotting routes so there's no doubling back or planning jobs in extra detail. "We're racking our brains trying to figure out what needs to be done to try to offset this," said Mr. Deigan.

Meanwhile, some people have rediscovered an old-fashioned method of keeping their lawns trimmed. Home Depot's online store has run out of reel mowers -- the kind fueled solely by a human being pushing the device through the grass.

"I don't know if we were prepared for this kind of demand," said spokeswoman Jen King. Interest began to rise last year, she said, but really surged this year.

Making mileage count

Companies that have been kept busy and are making money on the ever changing fuel costs are those that figure mileage rates for businesses and the IRS.

"We're getting tons of phone calls and lots of downloads from our system," said Paul Blinch, vice president of operations for Amherst-N.Y.-based CarDATA Consultants, Inc., which uses an online program so its clients can have their sales force enter mileage date as they go so the home office can track expenses in real time.

Most of CarDATA's clients use a two-part formula combining a fixed monthly allowance plus a per-mile credit. The goal, Mr. Blinch said, is to produce a revenue-neutral program that neither penalizes nor rewards.

Many companies, of course, keep things simple and let the IRS do the benchmarking.

It's actually a competitor of CarDATA's, market giant Runzenheimer International of Rochester, Wisc., that the IRS has used since 1980 to supply raw data leading the agency to arrive at the magic number, which now stands at 50.5 cents per mile.

Ted Schuerman, Runzenheimer research director, said the standard deduction cap is based on a secret formula that weighs six cost factors -- fuel prices, tires, maintenance, insurance, registration fees and depreciation.

The IRS reimbursement of 50.5 cents a gallon was set in January, long before prices hit $4 a gallon. Generally the IRS sets that rate once a year and leaves it, except a new precedent was set in 2005 when, after Hurricane Katrina, the agency raised the mileage rate 20 percent to 48.5 cents a mile, which held steady until this year.

Fuel-efficient travel

Some people are looking to vehicles with better gas mileage. The waiting list to buy a new Smart Car is about 18 months, said Gregg Szabatura, general manager of smart Center Pittsburgh.

Another way to save gas is by carpooling. An Internet-based service, erideshare.com, has more than tripled its activity since March, said founder and executive director Steve Schoeffler. Before March, the Web site, which allows visitors to either request or to offer a ride, whether local or interstate, averaged 700 visitors a day. In the last week of May, it registered about 18,000 visitors.

A recent check of erideshare.com showed 60 Pittsburgh-area carpool listings.

CommuteInfo, a program of the Southwest Pennsylvania Commission, was created in response to the OPEC oil crisis in the 1970s. Known then as Ride Share, it took its current name six years ago, with a revamped Web site, www.commuteinfo.org. Program developer Lisa Kay Schweyer said last month, the Web site logged more than 21,000 visitors, the greatest number in its six-year history.

What visitors find at www.commuteinfo.org is not simply a listing of possible commuting buddies, but an information-heavy Web site designed "to help individuals find out what the options are, what the considerations are that they need to think about before making that change."

May also brought a 42 percent increase in calls to CommuteInfo's toll-free number, and an equal increase in the number of people registering for the program, Ms. Schweyer said. In response to the increased demand, the agency has added two new vehicles to its vanpool fleet, bringing the total to 38.

Carpools registered with the agency have remained steady at about 250.

For those who want to get rid of a car or lose their cars all together, but still have access to a vehicle, Zipcar is an alternative to traditional car rental companies.

Jenna Cox, general manager of the Pittsburgh office of Zipcar, the Cambridge, Mass.-based car sharing service that came to town in August and bought out competitor Flexcar in November, said in recent weeks, "We're seeing new members joining every single day."

Zipcar allows members to share vehicles by picking them up and returning them to fixed locations and paying by the hour. In the past month, Ms. Cox said, the company has seen a 10 percent increase in the use of its vehicles. Perhaps more significantly, 50 percent of members have indicated that they have held off on purchasing a second vehicle since joining Zipcar, and some 60 members have sold the cars they already owned.

Next month, the company will offer the opportunity to sample that experience with its "Low Car Diet" program, in which it will seek out 30 car owners in each city in which it operates to surrender their car keys for one month. In exchange, they will received unlimited use of Zipcar vehicles, bus passes and discounts on cycling and walking gear, among other incentives.

Boaters hit hard

Motorists who are putting $50, $60 even $70 or more into their gas tanks can be glad they aren't paying $4.69 a gallon, which is the cost to boaters at Fox Chapel Yacht Club.

The gas, which is 89 octane, is more expensive than it is on land because the insurance required to be able to pump gas on water is much higher because a spill can be much more devastating to the environment.

Despite the high gasoline prices, Peter Pawlak, who sells boats at the yacht club, said they have had an increase in sales.

"We've sold over 80 boats this year, that's a very good year," he said.

Over the course of the past three years he said he has watched gasoline prices ticking up, but that doesn't mean people are spending less time on their boats, instead, they aren't taking the boats as far.

The people who are spending money to buy gas to go out on a boat are doing it for pleasure, he said.

"The skiers still go out skiing, the fishermen still go out fishing," he said.

When Bill Griesmer, 73, of Bethel Park, takes his boat out, he said, he is not thinking of the cost of gasoline, instead he is thinking about the time he is spending with his family.

"The shock" he said "is paying the better part of $5 when you fill up."

Post-Gazette Staff Writers Elwin Green, David Guo, Teresa F. Lindeman and Bill Toland contributed to this report.
First published on June 11, 2008 at 12:00 am