Rising fuel costs hurting bottom lines, causing services to be cut

Jun. 17—With prices of regular gas up 67% compared to last year and diesel 87% higher, local motorists say they're feeling a financial pinch but are getting creative to offset the cost.

Rising fuel prices also could force local governments to reduce services, officials say, but demand for travel packages remains robust.

According to Clay Ingram, spokesman for AAA Alabama, the average cost in Decatur for a gallon of regular unleaded gasoline was $4.59 on Thursday. AAA reported this time last year, the price was $2.75. Meanwhile, diesel fuel is $5.53 a gallon, up from $2.96 on June 16, 2021, AAA reported.

Sheila Hemphill of Decatur said the gas prices are affecting her household.

"My husband retired and he went back to work," she said. "We're consolidating trips — going to the grocery store and running other errands on the same trip. We don't have vacation plans right now. Travel, hotels (and) air fares are up. It has affected everything. The high price of travel is putting things on hold."

Sixth Avenue Chevron owner Ajay Jain in Decatur said he's not certain why fuel costs are up but said all the items in his store are costing him more.

"Our customers are getting scared because prices are so high," he said. "It's usually a peak time for us. But gas prices are so high, and people are not getting out as much."

He estimated his overall business is down about 10% in the past few weeks due to the high gas prices.

"We're not selling as many sandwiches and snacks," he said. "When gas prices go down, it will get better. We're hoping everything gets back to normal but that might be months away. Gas impacts everything. ... Price is going up for everything."

Christopher Houser, a cashier at the store, said, "People are putting some things back on the shelf when they see they can't afford the gas and their snacks. A lot of people are afraid. For two weeks, the gas prices went up five to 10 cents every day. We're not seeing a lot of our regulars. They've quit coming."

Decatur's Jake Roberts feels the shutdown of the Keystone pipeline project is playing a key role in the higher cost of gas.

Under pressure from native Americans, landowners and environmental groups, Biden revoked a key permit on the pipeline that was expected to deliver about 830,000 barrels of oil a day from Canada to Nebraska.

"He should not have closed down the pipeline," said Roberts, 25. "He was blaming the coronavirus for people getting laid off and he closes the pipeline. That doesn't make sense. ... I work in Huntsville and the drive is getting expensive."

He said it is costing him $56 to fill his small car's gas tank now.

"We've changed our vacation plans because of the cost of gas," he said. "We were going to Orange Beach, but we canceled that. I hate paying the gas prices, but if I have to I have to. We don't have a choice. Everybody has to get gas. My wife had to go back to work."

Irma Yolanda Garcia of Decatur said she spent more than $600 on gas traveling to West Palm Beach, Florida, in her minivan last week. "And I'm spending more for gas just going to and from work from Decatur to Madison. It is starting to worry me," she said.

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Government's expense

Morgan County commissioners are worried some services might be curtailed due to rising fuel costs.

District 3 Commissioner Don Stisher said his shop workers are doing what they can to conserve gas while operating county vehicles and machinery.

"Everybody across the board is doing what they have to do to get things done," Stisher said. "The percentage of operational budgets will be less because of the fuel. ... We'll see a reduction of service. ... It's going to be challenging, and if this continues into 2023 you will see a lot of things that will have to be cut."

District 1 Commissioner Jeff Clark and District 4 Commissioner Greg Abercrombie said the Sheriff's Office and county garbage service require a lot of fuel, and they expect those departments will be requesting more money when fiscal 2023 budget discussions begin in August.

"Next year, we'll start seeing some repercussions of the higher energy cost," Clark said. "Right now, it is a little too early to say. ... Instead of paving 12 miles of roads, it might be 10 or 9 miles. Services will have to level out and whatever we can afford to do is what we will do."

He said the county will lose additional money if gas prices remain high.

"Parks and recreation will be impacted because these tournaments they hold," he said. "Right now, I don't think it is affecting us. But a year from now, if gas is $7 a gallon and nobody is going to the ball park, renting our fields for travel ball tournaments, that revenue stream is not going to be there."

Abercrombie said when the Rebuild Alabama fuel tax money decreases because fewer gallons are being purchased, the county will feel the pain. The revenue from the program goes into improving infrastructure, he said.

"Gas tax revenue is going to come down," he said. "So much of that comes back to the county. When people quit buying gas at $7 a gallon, those accounts we're pulling money out of to pay our people and run shops, that is going to come down the same time we're going to have to spend more to get the products we're buying. We'll be getting pinched in both directions."

Commission Chairman Ray Long said thus far the departments are maintaining their budgets and he doesn't anticipate the environmental department having to raise fees for garbage service.

Delivery businesses are feeling the pinch, too. Grubhub and DoorDash said they are trying to help drivers cope with increased gas prices.

In a written release, DoorDash said it launched a gas rewards program in March that has allowed its drivers to receive a 10% cash-back benefit.

Grubhub spokeswoman Jenna DeMacro said her company is "constantly making adjustments" on a market-by-market basis to ensure the company has enough drivers to meet demand.

"This includes increasing driver pay given current gas prices and continuing to monitor the situation. We also have partnerships with GasBuddy and CarAdvise that give our drivers access to discounts on gas and car maintenance." — Travel still robust

One local travel agent, Faye Letson McWhorter, said despite the high fuel costs, the travel business is strong. She said the pent-up demand for a safe and quality vacation delayed because of the pandemic has families flying to more locations.

"Business is booming right now but only about one of 20 families is driving to their destinations," McWhorter, president of Elite Travel Co. in Decatur and Huntsville, said of travel booked with her agency. "The low-cost carriers out of Huntsville are making this possible. But despite the high fuel costs, a family of six will still drive because it makes better economic sense than purchasing six airline tickets."

She said European river cruises are the hottest packages sold this summer. "People are ready to go," she said. "People are flying to their destination and getting a rental car or taking a cruise from there. Driving vacations (booked with the agency) are down about 50% overall. Instead of driving to Orlando, they're taking a low-fare carrier to Las Vegas for the same or cheaper cost."

She said "people are adapting because they want to get out." She added COVID remains travelers' No. 1 problem because some people didn't get shots and need proof of vaccination before going on some trips.

AAA's Ingram said, "Despite high gas prices, people are still traveling. What we are seeing is people being creative with their spending in other areas to save money. They might eat a little more economically; maybe instead of going out to a restaurant every night, some are ordering a pizza and eating at the hotel."

The travel experts said they were glad when the Centers for Disease Control and Prevention ruled that Americans don't need a negative COVID test before re-entering the country.

"That'll help people traveling abroad," Ingram said. "It was scaring some people from traveling. I think that will relax people thinking about Europe."

He suggested travelers to "do your homework and compare prices."

"Don't limit yourself," Ingram said. "Plan as far in advance as you can. Good deals, especially on cruises, are out there."

— mike.wetzel@decaturdaily.com or 256-340-2442. Twitter @DD_Wetzel.