Sunday July 9, 2006

High gas prices hammer businesses

High gas prices hammer businessesWASHINGTON - It’s early morning in San Francisco, and Planet Organics is preparing for the daily run: 12 vans, 10 mpg, and pump prices threatening the profits.

Last year, fuel cost $2,300 per week.

“Now we’re paying about $3,000 to $3,300 a week,” says Shahin Khosrabi with Planet Organics.

That’s a 30 percent jump in gas prices, while the company has only been able to raise its prices by 3 percent.

In Colorado, it’s all coming out of Cheryl Graydon’s pocket. She’s a volunteer for Meals on Wheels, delivering food to the sick and elderly. She has had to pick up extra routes after other volunteers backed out.

“They’re seniors, they’re on fixed incomes, they can’t afford the gas,” says Enid Bordon with Meals on Wheels. “They’re not volunteering.”

And they’ve been hammered by a crescendo of events — at home and abroad — all coming together at the pump: Instability and tension with Iran, North Korea, Venezuela, Nigeria, and sky high consumption here at home. The last week of June represented the second highest oil consumption on record — 9.5 million gallons a day.

Now, there are predictions that gas prices could jump another 25 cents by Labor Day, and even higher if another hurricane slams Gulf Coast refineries, already running at 94 percent capacity.

“Then we will see prices move dramatically higher, and by that I mean we could see $4 a gallon gas at our retail outlets,” says energy analyst Peter Beutel.

Already big business is feeling the pinch. Wal-Mart says high gas prices kept some customers away in June. Southwest is raising ticket prices again, while in Illinois the state is cutting back on mowing the grass along the highways — hoping to save $200,000 in gasoline. Call it going really green, to save some green.

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