Gas crisis hits all pockets

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Gas crisis hits all pockets

Businesses are beginning to pass increased costs on to consumers

May 5, 2001

BY M.L. ELRICK, HUGH McDIARMID JR. and BEN SCHMITT FREE PRESS STAFF WRITERS

Looks like it's going to take more dough to get your pizza delivered in Utica.

And that pain customers of florists in Detroit and Wixom are feeling didn't come from a poorly shorn thorn; it was the increased cost of having a dozen dandies dropped off at their sweetheart's doorstep.

With gas prices escalating throughout the Detroit area with no end in sight, businesses that log lots of miles are passing costs on to customers or scaling back their territory.

For the handful of Dy Dee Diaper customers in Canton and Plymouth, that meant the delivery van that usually takes away bad news dropped some off recently.

"Now we just do Ann Arbor and Ypsilanti," Deb Green of Dy Dee Diapers Unlimited said Friday. Her Kalamazoo-based company covers much of southern Michigan -- but not as much as before.

Diapers Direct of Michigan, which drops off clean disposable diapers and doesn't look back, is also considering shrinking its territory.

"We've been living with it," owner Hannah Arnold said of the rising price of gas. "We are going to have to look at it definitely if it goes up to the $3 a gallon that they're talking about."

The price of gasoline, which typically begins increasing around Memorial Day, began climbing last month and in some places has reached $2 a gallon. Relief is months away.

One reason, industry experts said, is specialty summer gasolines. Michigan, with only one functional oil refinery, must rely upon outside sources to meet its gasoline needs.

That means consumers already pounded at the pump are learning just what trickle-down economics mean: Higher costs for businesses trickle down to them.

Jon Matthews of Sam's Sorrento Pizza on Van Dyke in Utica expects to increase prices -- just as he did during last year's gas crisis when he upped delivery charges from $2 to $2.50 per order. Matthews said Friday he's ready to raise the rate by another four bits, to $3.

Suppliers who bring cheese and pepperoni are passing the higher cost of gas on to him, Matthews said, so he has little choice but to do the same.

"Usually, the people who want the delivery service understand why we're doing it," he said.

Not everyone sympathizes.

"People are offended delivery charges have gone up. It's hard to explain to them," said Pam Sedlmeyer of Executive Floral in Wixom.

Although she raised delivery charges from $5 to $6.50 earlier this year, Sedlmeyer said she, too, is a victim.

"Even the window-washing company that does our windows charges $1.50 more each time they come out," she said.

Livernois-Davison Florist in Detroit tried to strike a middle ground by settling for a modest 50-cent increase last month on its deliveries, which now cost $11.95. But owner Marcy Feldman said her husband and partner, Stuart, didn't go far enough.

"I wanted more," she said. "He doesn't want to shock our customers."

Sadly, there appears to be no escape -- at least not by car or truck.

Cliff Mathew of Sterling Taxi Service in Warren said the old police Chevys in his fleet run only on premium, which on Friday was above $2 at many stations.

"It's just killing these drivers," Mathew said. "If they start quitting because they're not making enough money, we're going to have to" raise rates.

The story is similar with diesel fuel.

Timothy See, general manager of Frisbie Moving and Storage in Detroit, said it's only a matter of time before Michigan regulators allow moving companies to hike rates by 5 percent -- an increase already tacked on to interstate moves.

"With the recent spike we just experienced, I have a feeling we will be putting on a 5-percent increase by the end of summer," he said.

But don't blame See.

He said his garbage hauler in Scio Township just upped fees by 2 percent.

Things are tough all over.

Contact M.L. ELRICK at 313-223-3327 or elrick@freepress.com. Bill Laitner and Patricia Beck contributed to this report

http://www.freep.com/money/business/gas5_20010505.htm



-- Martin Thompson (mthom1927@aol.com), May 05, 2001

Answers

What of airlines?? I haven't heard of any shortage of jet fuel yet, have you? Also, I know some Motel/Hotel chains are adding a energy surcharge to their bills now too.

-- Rob McCarthy (celtic64@mindspring.com), May 06, 2001.

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