Businesses Feel Pinch of Rising Gas Prices Friday, June 9, 2000 By Jim Suhr

DETROIT  With seven fuel-thirsty minivans making up to 100 deliveries a day, Sherrie Johnson can only fume as the price of gasoline cuts into profits at her family's three flower shops. Gas costs have shot up 53 percent in the first five months of this year from the same period a year ago for Flowers by Ray and Sharon in Muskegon, Mich. As a result, Johnson is charging customers an extra $1 for each delivery.

"I'm hoping there's relief in sight soon, but not from what they're saying," she said Friday. "Every business is feeling the crunch right now."

That's the case nationwide, where businesses saddled by the highest gas prices in two decades often are trying to recoup some of them in sales of everything from flowers to frozen shrimp and tree bark to repairs.

Nationwide, the average price of regular unleaded is $1.56 a gallon, the American Automobile Association said. Adjusted for inflation, the prices are the highest since 1980, when motorists were paying the equivalent of an average $2.66 a gallon for all grades of gasoline, including taxes, according to the Lundberg Survey Inc.

Experts attribute this year's rise in prices to production cutbacks by oil exporters, a strong economy that has raised demand for gasoline, new clean air standards and the start of the vacation season.

"Fuel has an impact on the price of every product," said James Buchen, an official at Wisconsin Manufacturers and Commerce, that state's largest business group. "It's clearly putting the squeeze on companies of all types."

Just ask Barbara Stevenson, who owns three fishing boats in Portland, Maine, where the cost of diesel, about 88 cents a gallon, is double what it was a year ago.

Fuel costs add up quickly on 87-foot trawlers that burn 550 gallons to 700 gallons of diesel fuel a day, and the added expense cuts into what the crew earns at the end of a 10-day trip, she said.

In Raleigh, N.C., the rising price of filling up the 30-vehicle fleet at Metro Heating and Air Conditioning has led to an extra $5 charge for visits by repairmen, assistant general manager Drew Langdon said.

"Our gas cost has gone up 30 to 40 percent in the last nine months, just running the figures in my head," he said.

Other businesses are trying to keep prices in check  at least for now.

At Michigan-based Domino's Pizza Inc., executives who watch gasoline prices as closely as the cost of cheese have not beefed up pizza prices or their 50-cent-per-delivery reimbursement to drivers, spokesman Tim McIntyre said.

"We will evaluate the impact on our drivers if the (gasoline) prices stay at this level longer than is typical," he said

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-- Martin Thompson (mthom1927@aol.com), June 09, 2000