Gas-O-mean: Prices Up Over $3 per Gallon

By Susan Bush
12:00AM / Thursday, September 01, 2005

Getty gasoline prices were over $3 per gallon on Sept. 1.

Gregory Winslow of Pownal, Vt. saw the dollar signs on the wall a few weeks ago and purchased a scooter to save fuel costs.
On Sept. 1, with gasoline prices well above $3 per gallon at most service stations, Winslow said he was considering yet another strategy.

“I’m going to trade the scooter for a donkey,” Winslow said.

Winslow was joking but his wife Edna wasn’t in a jocular mood. The couple lives on a small, fixed income and Edna Winslow said that she was upset because she was selected for jury duty in Vermont and will have to make a daily 25-mile round trip from home to the courthouse until her service is completed

Fuel costs have risen to the point that the trips will hurt the family budget, she said.

“This will hurt,” she said. “If people on fixed incomes are going to be forced to travel, then there should be money to help with the cost.”

Her husband tried to soothe her.

"I'll let you ride the donkey," he quipped.

Up, Up, and Up It Goes

Fuel prices in Pownal reflected the ever-rising, ever-changing price at the pump; the Village Market on Route 7 posted a $3.10 per gallon price for low grade gasoline and the Stewart’s Shoppe, also on Route 7 and until recently reputed to be selling gasoline at the lowest prices in the region, had upped the low-grade gasoline price to $3.35 per gallon.

Stewart's gasoline prices at the Pownal, Vt. store.

Gasoline prices were over $3 per gallon in North Adams as well, except for the Gibbs station on State Road, which at 3:35 p.m. on Sept. 1 was selling gasoline at $2.99 per gallon for all grades of gasoline. Cars and trucks filled the self-service station gas islands and others waited in line to fuel up at the lower price; just a few feet away on State Road, the Getty station was selling low-grade gasoline at $3.25 per gallon.

"This Hurts Everybody"

Wayne Piaggi of Williamstown works as a truck driver who drives a tri-axle dump truck with a 100-gallon tank that uses diesel fuel. Piaggi said he filled the truck’s tank with diesel that was selling for $2.60 per gallon during the morning of Sept. 1.

“Tomorrow when I go to the pump, it will probably be much higher,” Piaggi said. “This [fuel price hikes] hurts everybody. People get laid off because of things like this.”

Questions are being raised about the steep hikes that have occurred nation-wide since Hurricane Katrina struck the Gulf Coast and interrupted oil and gasoline production, with many people believing that the jumps are unnecessary quite this soon after the horrific disaster. During a televised news report broadcast on Sept. 1, New York state Rep. Michael McNulty said that there should be a government investigation into what may be price gouging.

Gasoline prices are determined by several factors other than supply and production levels. Whether a gasoline retailer is a “commission agent” or a “re-sell agent” can affect the price they pay for the gas that fills their gas pump storage tanks.

“Commission agents” do not own the gasoline that they sell; the gas is owned by companies such as Sunoco or Citgo, and the companies pay the vendors a flat rate percentage based on sales. “Re-sell agents” buy gasoline outright and then must price the fuel in a manner that will generate some profit. “Re-sell agents” may be disadvantaged because to buy new gas supplies, they must sell what is already in their tanks, and may not be able to take advantage of any dip in wholesale prices. And by contrast, when the tanks are low or empty, re-sell agents are forced to pay the going rate to acquire more fuel.

According to several news and anecdotal reports, some stations are having another problem; existing pumps won't register prices higher than $2.99 per gallon

All gas prices are impacted by the prices set by gasoline wholesalers. Locally, some of the gas sold is purchased by wholesalers at the Port of Albany, N.Y..

Truck driver Wayne Piaggi works in an occupation that relies on vehicle fuel.

The costs of gasoline and diesel fuel have risen steadily and of late, sharply, throughout the summer. The most recent spikes may be too much for some businesses and families to bear, Piaggi said.

“All kinds of people are going to be hurt,” he said. “This is going to hurt [business] profits and that will hurt employees. The price is through the roof. How is a boss supposed to pay wages, benefits, all kinds of insurance costs, and now, in my business, $100 a day for fuel per truck? That’s $500 per week for one truck and [Piaggi's employer] has two trucks.”

Those who operate as independent truck owners/drivers are in a particularly tough situation, Piaggi said.

“I really feel sorry for the independent truckers,” Piaggi said. “They are really getting it. I believe that a lot of the independents will be forced out of business.”

Heat Rises and So Do Heating Costs

Rising heating fuel costs are impacting homeowners, businesses, and entities such as fire departments. Clarksburg Volunteer Fire Department Chief Carlyle Chesbro Jr. said that heating oil costs are impacting the department more than gasoline prices at this time.

Sept. 1 price at the Pownal, Vt. Village Market fuel pumps.

Fire trucks only use fuel when they are in operation, and the town provides the vehicle fuel, Chesbro said. The fire department pays for the fuel used to heat the fire station, he said.

"We take care of our own heating oil and we're paying $2.19 a gallon," Chesbro said. "But we were only allowed to buy just so many gallons because of the changing prices."

The station used about 2,500 gallons of heating fuel during the last heating season and the department's budget is at about $17,000. With fuel costs eating away at more and more of the budget, other things, such as trainings and equipment purchases, must be reduced, Chesbro said.

"We have a big station, but we have six trucks," he said. "We have to keep them warm. This is all having quite an effect."

Susan Bush may be reached via e-mail at suebush123@adelphia.net or at 802-823-9367.