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Rising Gas Prices Hit Businesses: Many Passing on Added Expenses to Customers

Posted on: Wednesday, 26 April 2006, 12:00 CDT

By David Ball, Florida Keys Keynoter, Marathon

Apr. 26--While nearly every Keys resident is feeling the pinch at the gas pump these days, the businesses that generate mass fuel consumption, such as charter boats, dive boats and taxicab companies, are getting hit the hardest and may have to pass those bucks back to the local consumer.

In Islamorada, where gas prices are normally some of the lowest in the Keys, charter captain Steven Leopold estimates his daily diesel costs up to $375, not including $100 in oil every two to three weeks.

"My trips that I'm booking now, I'm charging an additional 10 percent" from last year, Leopold said. "That covers additional fuel costs for now, but who knows how much it's going to go up."

Leopold, president of the Islamorada Charter Boat Association, said nearly all of his 100 or so members are having to raise their prices, change their oil less frequently or take their time getting out to the fishing grounds in order to save a little coin.

This comes at a time when the Keys' tourist economy tends to slow down (and during a year that is already down, according to many tourist businesses), even though the cost of gasoline keeps rising.

"It's hard to raise your prices when you have someone who booked in advance at a certain price," Leopold said. "But if it goes up another 10 cents a gallon, then I might have to."

All Americans saw the price of a gallon of regular unleaded gasoline jump from an average of $2.50 a month ago to Tuesday's average of $2.92, according to the American Automobile Association's Fuel Gauge Report, the nation's most comprehensive fuel survey.

But in Florida, the price jumped from $2.58 to $2.97 and approached the record of $2.99 set in October 2005. Today, diesel prices are not far behind at $2.96 per gallon.

In the Keys, prices range from a little over $3 to nearly $3.30 a gallon. Fuel experts say the high prices are linked to shipping costs and rising property costs and taxes.

Gayle Tippett, owner of Strike Zone Charters on Big Pine Key, said she's had to add a $2 fuel surcharge per person on her dive trips to Looe Key, and that's after switching to more fuel-efficient four-stroke outboard engines.

"It has directly affected us and beyond just the obvious," Tippett said. "Ice is more expensive, using UPS is more expensive. Everything that has to be shipped costs more now. It's now affecting everybody."

Tuesday, President Bush reportedly ordered a relaxation of environmental laws for gasoline refining and the funneling of crude oil away from the country's reserves to help ease the price increases.

But whatever the reasons, Jan Doelman, owner of Maxi Taxi and Five Sixes Taxi companies in Key West, is tired of the increases and offered a more local solution.

"The traffic situation in Key West is getting worse, and the traffic lights are the problem," Doelman said. "If the lights were actually coordinated, there would be a better flow of traffic and less stopping and starting, so we would use less gas. But the city said it needed a study done first, so I don't think it will every happen."

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Copyright (c) 2006, Florida Keys Keynoter, Marathon

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Source: Florida Keys Keynoter, Marathon, Fla.

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