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March 6, 2008

 

Increase in gas prices taking toll on consumers, businesses

Gas Prices

Joe McIntyre/staff photographer
Cortland Produce Co. delivery driver Marty Reid of Truxton loads boxes of food onto a delivery truck bound for Ithaca this morning. Gas costs are driving up expenses for businesses, leading to higher prices for consumers.

By CHRISTINE LAUBENSTEIN
Staff Reporter
claubenstein@cortlandstandard.net

CORTLAND — Cortland Produce Co. and Bill Brothers Dairy & Farm Market pay hundreds more a week for fuel costs than they did a couple of years ago, with numerous trucks and delivery routes to cover each week.
“It’s harder to make money because our expenses are so high,” said John Sears, owner of Bill Brothers. “We’ve had to take money out of our retirements to pay bills.”
Increasing gas and diesel prices are forcing local businesses to raise prices or lose profit, keeping people home and driving local school districts and municipalities to cut back spending in certain areas and raise taxes.
Locally, gas prices are hovering around $3.30 per gallon for regular gasoline and almost $4 a gallon for diesel.
Regular gasoline prices have increased about 62 percent statewide over the last three years, according to the U.S. Energy Information Administration, while diesel prices in the Central Atlantic region have increased about 68 percent during that same period.
Price increases are expected to continue.
The Organization of the Petroleum Exporting Countries said Wednesday it would not increase production despite increasing demand worldwide. The weakening dollar in which oil is priced on the world market is further contributing to higher gas prices.
A barrel of crude oil now costs nearly $105 a barrel.
Since gas prices hit $3 a gallon about a year ago, Cuyler resident Deborah Scutt has cut out visits to friends and nights out in Cortland.
“I don’t go as many places anymore,” said Scutt, 51. “Basically I go to work, to home and to get groceries. I don’t go anywhere because it’s so expensive.”
Higher expenses for individuals, local companies, school districts and municipalities do not just include gasoline, but a wide variety of products.
Product distributors have jacked up their prices, largely due to higher gas prices.
Last year, for example, Cortland Produce paid $10.50 for a box of breaded shrimp, and now it pays $13.50 for that same box. The company has had to respond by increasing its own prices, Cortland Produce General Manager Robert Oaksford said.
“It’s about 15 to 20 percent (higher) across the board,” he said. “Everybody has these costs; if you fail to react to them, you go out of business.”
Cortland Produce sells food and food service products at CP Cash and Carry on Owego Street.
Sears said he has not yet increased prices at Bill Bros., but probably should for financial reasons. The hard part, though, is charging more when many customers are already struggling to get by, he said.
Cuyler senior citizen Gordon Carpenter lives on a fixed income and can no longer afford the diet foods he is supposed to be eating.
“A few years ago I paid $1.59 for one meal,” said Carpenter, 76. “Now it costs $4. That’s huge.”
Local school districts and highway departments say price increases driven by higher fuel costs are almost as bad as the higher gas costs themselves.
Mounting blacktop costs will drive the Groton School District to have less paving work done as part of its capital project, while mounting equipment and asphalt costs are driving many highway departments to jack up their budgets.
“I think we put $10,000 more in our budget, and that’s just in road repair,” said Willett Superintendent of Highways Eugene Turshman, noting that budget is around $50,000.
But gas prices themselves are still a big concern.
At local school districts, gas budgets are climbing as athletic events, field trips and programs are being cut.
The McGraw School district may have to end its after-school program, which provides students with a late bus five days a week, largely due to an expected 45-percent increase in diesel fuel costs and loss of grant funds.
“If we don’t get a grant next year, it won’t take place,” Superintendent of Schools Maria Fragnoli-Ryan said Wednesday.