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Jennifer Robison
 

Gasoline prices hit new high

5 June 2008

By Jennifer Robison

LAS VEGAS, Nevada -- Standing at the gasoline pump sporting shorts, a T-shirt, sunglasses and bare feet, musician Tim Wray cut the perfect image of an easygoing surfer dude headed to California for a laid-back beach vacation.

Before Wray and his girlfriend, Alli Evans, could hang 10, though, they went Type A, plotting travel details with the intensity of "Vacation" patriarch Clark Griswold mapping a road trip to the world's largest ball of twine.

Wray and Evans, a Salt Lake City couple driving through town and tanking up Wednesday morning at a Terrible Herbst station on Sahara Avenue, conducted cost analyses on the myriad ways they could reach San Diego. Should they fly? Take his Isuzu Trooper? Drive her Toyota Tercel? Rent a car?

It's a calculation the two never faced until now, with gasoline prices setting records nationally and locally.

The local cost of a gallon of regular, unleaded gasoline swept past $4 for the first time this week, jumping from an average $3.99 Tuesday to an all-time high of $4.02 Wednesday, according to numbers from travel club AAA. Nevada fuel prices hit a record average of $4.05 Wednesday, while the national average peaked at $3.98.

Wray and Evans took the Tercel. The choice made for a tight fit: With a surfboard, mountain bikes, skateboards and other gear tied on top and crammed in the back, the white coupe looked like the sporting-goods version of a clown car. But you can't laugh at the savings. Wray and Evans expect to spend roughly $250 in fuel money round trip, compared with the $500 or so the roomier Isuzu SUV would have consumed.

Market watchers have mixed news for motorists seeking a quick break from expensive gasoline.

AAA doesn't forecast fuel prices, but local spokesman Michael Geeser said summertime costs don't typically level off until after the Fourth of July. That means the market could see more price gains in coming weeks.

Stephen Brown, director of energy economics for the Federal Reserve Bank of Dallas, said dropping oil prices should translate into relief at the pump soon.

The cost of crude oil, which makes up more than half the cost of a gallon of gasoline, crested at around $135 a barrel on May 22. By Wednesday, petroleum prices had fallen to $122.30 a barrel. That slide should help force gasoline prices down by roughly 25 cents a gallon in the next six to eight weeks, Brown said. And drivers might see another drop of 10 cents per gallon through summer's end, he added.

Until they feel that relief, motorists are making concessions to higher fuel costs. Consumers gassing up at Terrible Herbst on Wednesday described differing degrees of sacrifice.

Local real estate investor Tim Woodmansee bought a 2008 Chrysler Sebring about six months ago, after car thieves stole his Toyota Matrix. The Chrysler guzzles 16 miles per gallon, but Woodmansee isn't talking trade-in.

"It just means I need to make more money," he said.

Las Vegan Victor Flanders, an apartment-complex manager, said he's cut leisure spending in several areas.

Going to the movies?

"Ain't happenin'," he said.

Eating out?

"Ain't happenin'."

Driving to favorite haunts Texas Station and The Orleans?

"Ain't happenin'."

Instead, Flanders walks to Palace Station, across the street from his apartment community. He called a household moratorium on jaunts to Zion National Park as well, because the round trip would cost $100 in his Toyota Tundra pickup truck. Flanders put 6,000 miles on his car in the past year, compared with the 20,000 miles he said he traditionally racks up in 12 months.

Kenneth Post, who works with Flanders, has eliminated "all travel" from his budget. He and his girlfriend, Mary Kirkland, have also scaled back at the grocery store, replacing higher-grade meat cuts with hamburger and chicken.

"Pretty much across the board, we've tried to cheapen up on everything," Post said.

Local businesses haven't enjoyed the same flexibility.

A slumping economy prevents area companies from passing on too many of their higher costs to consumers, so entrepreneurs are largely eating rising fuel costs.

At Edible Arrangements, gasoline expenses cost $400 to $500 a month more now than they cost a year ago, said District Manager Paul Lemoine. But if the company raised its $12 delivery fee to compensate, people might order fewer of the company's fruit baskets. So for now, Lemoine, who oversees stores on East Flamingo and West Desert Inn roads, coordinates deliveries with his company's two vans more carefully.

"There's not a whole lot we can do, except just take it, and keep our fingers crossed and hope for the best," Lemoine said.

Nor has DiBella Flowers & Gifts on West Charleston Boulevard transferred its higher fuel expenses to customers.

Owner John DiBella said he's absorbing all the extra costs, keeping his deliveries at a base price of $6 to $7 per order. DiBella isn't grappling with pricier gasoline alone; costs for the fruit and flowers he puts in baskets have nearly doubled in some cases, as freight companies slip record fuel expenses to merchants.

DIBella asks his drivers to stick around longer than usual in the morning so he can line up deliveries as efficiently as possible. He's always built in a cushion on a few items to protect his business from cost spikes, but that leeway has dwindled to nearly nothing. He suspects he'll have to raise some of his prices eventually. He's also priming consumers to scale back on flowers rather than cutting out floral purchases altogether.

"We don't care if you were going to buy a big bouquet, and now you can't," DiBella said. "Come by and buy a single rose. Just don't give up on us."

DiBella said he's about ready to use his storefront marquee to send a message to Nevada's congressional delegation.

"I want to say, 'What the heck are you doing about gas prices?' I'm so infuriated," DiBella said. "Why don't they camp out on the front steps of the Capitol and say they're not going to leave until somebody decides to do something about gas prices? Be original. Do something."