Trickle-down effect of rising fuel costs

Yesterday's "Tube Talk" e-newsletter discussed rising gas prices and the effect the increase is having on small businesses. More than 64 percent of small business owners polled on DollarDays.com said revenue is down as a result of increased gas prices, and more than a quarter said they will have to lay off employees as a result.

Fifty-eight percent reported that their customers are driving less, which means fewer shopping excursions, and these owners said they expect this to worsen with the upcoming summer months. 

"Unfortunately, this is what we expected from this poll," said Marc Joseph, president and CEO of DollarDays. "With the recession and increasing fuel and food prices, being a successful small business owner is incredibly tough. 

"Gas prices are expected to continue to rise, and we're headed in to the summer and hurricane months, where prices typically increase, so it's no wonder there's not much optimism. It's a scary time." 

Other survey findings revealed that only 10 percent of small business owners are offering financial supplements to help their employees as a result of increased gas prices. Fifty-seven percent expect a decrease in tourism over the next three months, while 26 percent don’t expect a change, and 15 percent expect an increase. Sixty-seven percent of small business owners have changed their personal travel plans as a result of higher gas prices. 

While these businesses primarily are involved in moving consumer products and services, they aren't alone in being impacted by rising fuel costs. "Tube Talk" asked its readers, tube and pipe producers and fabricators, to share their thoughts about how the escalating costs are affecting them and their businesses. 

The president of a company that sells tube bending equipment wrote, "We have been seeing steadily increasing material cost. Virtually every product that we are using, both in the production area as well as packaging goods, has been rising in price. The gas price increases are typically passed on from the freight companies and service centers in the form of surcharges. I am sure we will be seeing the return of surcharges soon."

 A reader from Canada said, "Here in Toronto, Ontario, our gas has risen 0.22 U.S. cents per gallon in the last week and rising; correcting for dollar exchange, we are now sitting at 4.85 U.S. per gallon. I am thinking a $0.22 increase in one week in the States would cause a riot of some sort.

 I am not sure how it is affecting business here ,but fuel surcharges are going up, and the cost of food is going up almost daily. The oil companies have a monopoly in the Toronto area as every gas station has the same price until you get close to the U.S. border where they match the U.S. prices. 

"The high Canadian dollar is hurting exports ,but the import price of items has not dropped, and if our dollar drops the price of gas will go even higher. 

"Our provincial and federal governments do not do a very good job of protecting its citizens from big business as it would affect their tax revenues." 

An Indiana reader also brought Canada into the discussion: "I think we should lift oil drilling bans on U.S. soil. We are all more conscious of being eco-friendly, and I think oil fields started here would be done correctly with more attention paid to disturbing as little of nature as possible. This will make us less dependent on foreign oil. If being less dependent on foreign oil has anything to do with the price at the pump. 

"I heard a commercial recently in the Indianapolis area talking about how we get X amount of oil from Canada and what a great thing this is and how it’s closer and going to create American jobs. If it is closer and supposedly cheaper to transport, then why can’t I go to a station owned by a company that sells Canadian oil and buy it for $1 or $2 a gallon? [Consumers] would be lined up to buy it at these stations, and [this company’s] profits would go up, while others went down. Then [competing companies] would lower their price per gallon and then our economy could start an upward trend again. 

"But wait, I see Canadian oil sells for the same as Mideast oil, so we all lose, except the oil companies and the oil barons driving up the markets on Wall St."

Costs at the gas pump reportedly are getting closer to record levels. The Los Angeles Times has reported that California’s average price over the last week for a gallon of regular gasoline is up 4.4 cents to $4.205, and the U.S. has seen a 5.3-cent rise to $3.844. 

A CNN money report described how prices rose for one consumer in the middle of a fill-up! While I haven't had this experience, I have suffered from sticker shock filling up my regular-gasoline-burning vehicle with a huge tank. And I've begun to drive less. Seems I've been here before. In fact, I've written about this very topic—rising gas prices—in past years. It’s getting to be old news, but I imagine we haven't heard the last of it.

Follow fabcomlady on Twitter.

Become a fan of The Fabricator® on Facebook.