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Saturday, November 10, 2007

Higher gas prices arrive in area

Both retailers and customers in the Roanoke Valley look to rethink consumption strategies as higher gas prices create a pain at the pump.

Cab driver Daryl Hilliker fills up the gas tank of his four-cylinder cab Friday. To compensate for higher fuel prices, Yellow Cab in Roanoke may seek an increase in its current fuel surcharge of $1 per trip -- imposed 18 months ago -- or in the metered rate.

Sam Dean | The Roanoke Times

Cab driver Daryl Hilliker fills up the gas tank of his four-cylinder cab Friday. To compensate for higher fuel prices, Yellow Cab in Roanoke may seek an increase in its current fuel surcharge of $1 per trip -- imposed 18 months ago -- or in the metered rate.

If the looming prospect of regular gasoline at more than $3 a gallon isn't enough of a worry for Billy Roberts, co-owner of Yellow Cab in Roanoke, there's the concern that this peak in prices won't be closely followed by a valley.

The price of gasoline "is an issue, and it's going to be an issue, and, unfortunately, I don't think it's going away," Roberts said. "You have so much tension in the Middle East."

Yellow Cab may have little choice but to solicit municipal permission to raise prices early next year, he said. The company may seek an increase in its current fuel surcharge of $1 per trip -- imposed 18 months ago because of higher fuel prices -- or in the metered rate, which is $2.80 for the first one-eighth of a mile and 20 cents for each one-eighth of a mile after that.

Roberts' fears are widely shared. Vaughn Frey, owner of nine area Papa John's locations, frets that people will splurge less on even such little luxuries as pizzas. Pricey gas "takes more money away from people's pocketbooks to eat, and that's where it hurts the delivery pizza business," said Frey, who will keep pumping out the discount coupons in an effort to offset his customers' petrol-driven budget woes.

Just as the time arrives for turkey, trimmings and yuletide cheer, an unseasonable surge in the price of oil is creating a pain at the pump.

And unlike in past spirals, there's no hurricane damage driving up prices and no damaged refineries in the Gulf of Mexico to blame. The summer driving season is over. Mideast producers have been pledging to hold down oil prices by pumping lots of crude. But prices are up anyway.

Worst-case scenarios project crude oil at $120 a barrel, which would translate into regular gasoline priced about $3.60 a gallon. Still, others predict that rising oil prices will solve themselves by triggering an economic slowdown that reduces demand and sends oil back to the $75-a-barrel level, which would probably reduce regular gasoline to about $2.25 a gallon.

One economist said he foresees the possibility of wholesale shifts in housing, as area residents with long commutes move closer to their jobs.

"The biggest impact from persistent higher gas prices is going to be on where people live," said Peter Morici, a business professor at the University of Maryland. "Three dollars a gallon is going to cause some change. Four dollars a gallon will cause a lot of change."

Don't blame retailers, they say. Atul Patel, who owns a chain of Roanoke Valley convenience stores, said Thursday he was keeping only about 3 cents of his $2.99 price of a gallon of gas. And with gas more valuable, more people were stealing it.

Of course some measure of pocketbook relief lies underfoot. By accelerating gently instead of racing off, it is possible to conserve fuel in the tank, said Gabe Saker, owner of Saker's Driving School, who has good reason to teach those techniques to students. Each of his six training vehicles goes through about half a tank of gas a day. Releasing the accelerator and briefly coasting is also conservative, Saker said.

Getting around by foot or bicycle, with all its practical limitations, works for some people. Frank Giannini of Roanoke County, head of young adult education at the Art Museum of Western Virginia, bicycled to work two to four times a week during the summer. "I filled the gas tank once in the month of July," he said.

That's not an option for Alan Garst, who builds speculative and custom homes.

"I need big vehicles, big trucks," he said while putting a few gallons into his job-site pickup. As for the extra cost, he said, "I just have to eat it."

At the next island a few minutes later, Vanna Sieng of Silver Spring, Md., fueled her eight-cylinder Ford Explorer with $3.19 premium gasoline. She'll increase her hours in multiple jobs as a seamstress, hotel maid and employee of a nail salon to continue to afford her large sport utility vehicle, which she drives to Roanoke monthly for business.

"It's very expensive," she said, after giving the cashier a $50 bill.

Individuals' costs are multiplied many times in the fuel outlay for large vehicle fleets such as the Valley Metro bus system, which goes through 7,500 gallons of a blend of 2 percent biofuel and 98 percent diesel every seven to 10 days. If fuel prices stay high, the system faces the difficulty of keeping buses rolling on schedule -- service cuts are off-limits -- without an increase in revenue. The fares were increased last summer and won't be increased any time soon again.

Bus service executives would probably respond to continued high fuel costs by cutting maintenance of the Campbell Court business station and an operations and vehicle repair center in Southeast Roanoke, said Chip Holdren, assistant general manager. For instance, instead of having the maintenance personnel on duty until 9 p.m., they might go home a few hours earlier, Holdren said. One possible bright spot for Valley Metro, he added, is that higher gasoline prices could prompt more people to sometimes take a bus instead of their cars.

All this hubbub about gasoline was but a distant din until the bill for a fill-up recently came to $55 for Angie Rodkey, a Roanoke mother and housewife. She and her husband don't ordinarily eat out and her son, Ben, rides in a carpooling arrangement to school with two other families.

"Maybe we should put Ben on the bus," she told her husband the other day. After a brief discussion, their conclusion was, "No, let's see what happens." Pressed for how she might save a few bucks if the next fill-up and those beyond are also $55, Rodkey said she would probably cut back on treating herself to what she calls "frivolous" shopping for clothes and other treats.

But low-income people don't have nonessentials to cut out in many cases.

If gas prices stay at $3, or above, "for most of our clients, that would be devastating," said case worker Patsy Ashe at the Presbyterian Community Center in Southeast Roanoke. "I expect we're going to see a whole lot more people coming through our door wanting gas vouchers," said Ashe, explaining that qualified clients can receive $20 gas vouchers twice yearly.

A year ago, the Roanoke area's average price was $2.03.

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