Escalating fuel prices squeeze Whidbey business
July 3, 2008 · Updated 4:28 PM
Be thankful this isnt Friday Harbor. A gallon of regular unleaded would cost $3.01, as of Thursday afternoon.
Unfortunately, thinks arent much better on Whidbey Island.
According to washingtongasprices.com, the average fuel price has jumped six cents in the last three days and 17 cents since Aug. 1. The rapid increase in fuel prices is affecting local businesses, both small and large.
Locally, AM/PM on Highway 20 jumped four cents between Wednesday night and Friday morning to $2.57 per gallon. Soundview Shoppers fuel jumped five cents this week to $2.69, according to washingtongasprices.com.
For businesses that have a bottom line that depends on the cost of fuel, such as the Whidbey SeaTac shuttle, the increases are having a staggering effect. General Manager Mike Lauver said that the company has seen a $1-per-gallon increase in the 18 months the business has been open.
Fuel prices are a pretty sticky issue, Lauver said. It has been a big bite on us recently.
The company logs approximately 500,000 miles each year in its diesel-powered vans.
Since the state regulates the rates the company can charge, Lauver said that it can not immediately raise rates to recoup the increase in costs.
If costs go down, we should be able to lower our costs, he said. And if costs go up, we should be able to increase our cost.
They are not allowed to offer discounts or coupons, and a surcharge involves a lengthy hearing process, Lauver said.
John Sitko, who owns John Sitko Trucking, Inc., said that he is able to pass some of the increase to his customers. He said he charges between a 14 and 24 percent surcharge to recoup some of his fuel cost.
His 16 trucks roam the Western states, hauling fresh produce and fresh flowers. He said his trucks use more diesel because of the refrigeration units. Also, his drivers are allowed to run the air conditioners while sleeping in extreme heat.
Theyre getting the truckers first, Sitko said. Its always worked out that way.
He said that the trucking business is able to pass along the extra cost to its customers, so diesel goes up in cost first. Even when the extra cost is passed along to consumers, people will still pay the price, Sitko said.
When you go to the grocery store, you may or may not pass on the Powerade, Sitko said. But you will buy broccoli you need to eat.
Even those in the business of protecting the public are hurting.