Pain at the pump means change for US drivers

Mailman Warren Williams winced when he saw how quickly the pump ate up his twenty dollars at a downtown Chicago station charging $4.79 for a gallon (3.8 liters) of regular gasoline.

"Prices are ridiculous," said Williams, who used to spend about $100 a week filling up his sport utility vehicle and is now paying $175 to $200.

"I'm looking into a bus pass," he said.

Vehicle fuel now accounts for 8.9 percent of the average US family income, up from just 4.2 percent in April 2009.

The rapid spike in oil prices sparked by recent unrest in the Middle East is forcing Americans to tighten their belts and change their driving habits, a tough thing to do in this car-dependent country.

It also threatens to stall the country's fragile recovery from the deepest economic downturn in decades as higher fuel prices force businesses to fire workers if they can't find other ways to offset the extra costs.

Robin O'Grady has cut back on the hours she's giving her employees and is afraid she'll soon have to lay off some of them at her downtown Chicago Edible Arrangements fruit basket delivery service.

"It's sad because these are people that are either in school or else mothers with young children," she told AFP.

"I'm watching my pennies so I can keep my people employed, so I can pay my bills. I have to watch everything."

But the bills keep coming, her fuel costs keep rising, and the franchise rules do not allow O'Grady to raise prices or delivery charges.

The impact goes far beyond just filling up the tank on delivery trucks, said Michael Stolfe, who runs his family's legendary Connie's Pizza chain.

"We use a million pounds of cheese a year, and it's an extra two cents a pound just for the freight," he said.

The doubling of fuel costs for the company's 30 delivery trucks - which have special ovens to keep the pizza hot - have cut profits by about two percent since last year.

Increased commodity costs have taken a five-percent bite out of the bottom line, Stolfe said.

"You have to be very careful about raising prices in this economy... You basically just have to suck it up and make cuts elsewhere to be able to afford to do it, to run the business."

Chicago has some of the highest gas prices in the nation. The average price hit a record $4.47 a gallon Wednesday, up from $3.15 a year ago.

Nationwide, average prices are still about 13 cents below the record $4.11 a gallon recorded on July 17, 2008, according to the AAA motor club.

But even people on the upper end of the pay scale are feeling the pinch.

"We've done a good bit of trimming," said lawyer Jeff Calabrese, who drives about 100 miles a day just taking his sons to and from a specialty school on the other side of the sprawling city.

"We got rid of certain luxuries - eating out, even trying to trim the cable bill, stuff like that, just to make ends meet," he said.

Across the country, many people have started to take public transit or their bikes instead of their cars and are talking to co-workers about carpooling, said AAA spokeswoman Beth Mosher.

"Four dollars (a gallon) is really a tipping point where people take a hard look at their travel plans," Mosher told AFP.

But while this may have a positive environmental impact, past price spikes have shown it won't last long.

"People find their cars to be very convenient. They are often times reliant on their cars, particularly in areas like the Midwest, " Mosher said.

"Once gas prices start to come down, they'll hop back into their cars again and go back to their old ways."

mso/tr/mdl/jk/jj

 

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