ORIGINALLY WRITTEN JANET HAMOUS
With the average cost of a tank of gasoline approaching $50 and no end to the price increases in sight, consumers and business owners are digging deeper into their pockets each week and finding they must cut back elsewhere to compensate for the high price of gas.
The financial burden
“For people who drive something like a Suburban, it’s nothing for them to leave a $100 bill in the store,” said Laura Legg, manager of the Ampride convenience stores in Hillsboro and Marion.
Legg said they have seen a recent increase in the number of bad checks.
“We’ve actually changed our check cashing policy in the stores,” she said. “We used to let them write it for extra cash, and now we’ve gone to amount of purchase only.”
“We’re seeing more checks for $30 and $40, where it used to be $10 and $12,” said Delbert Peters, comptroller for Cooperative Grain & Supply in Hillsboro, which owns the Ampride stores. “That’s obviously related to the price of gas.”
He said that while most of the checks are covered when a deposit is made, people are finding they can no longer rely on “float time.”
“I think the banks are becoming more strict on enforcing negative balances,” he said.
Debbie Ewert, retail manager for Emprise Bank in Hillsboro, acknowledged that consumers are seeing less float time.
The Check Clearing for the 1st Century Act, or Check 21, enacted last October allows banks to create and transmit electronic images of checks, reducing the float time to hours instead of days.
But while consumers may be bouncing more checks, Ewert said the bank has not yet noticed an increase in slow pays or delinquent loans as a result of increased gas prices.
People are doing whatever they can to circumvent the price increases, said Laura Legg.
“There are a lot of people who keep their car up on the top half (of the tank) because gas prices are going up so fast,” she said. “Each night they’re filling up with $10 so they can get it cheaper before it goes up the next day.”
People are also reducing the amount of driving they do, she said.
“The commuters are still going, but there are lot of people who aren’t doing that little bit of extra driving,” she said. “I think it’s good for shopping at home.”
Drivers are also rethinking the type of vehicles they drive.
Hillsboro Ford co-owner Randy Hagen said people are beginning to talk about trading sport-utility vehicles (SUVs) for more fuel-efficient vehicles.
“The sale of (SUVs), both used and new, has slowed way down,” he said.
But even with the high cost of gas, fuel economy is not a high priority for many car buyers, Hagen said.
“They pretty much buy what they think they’ve got to have,” he said. “To get your best gas mileage in a car, you almost have to go with a small car with a manual transmission-and most people don’t want to shift anymore.”
Ford does offer a hybrid SUV now, but Hagen said it isn’t well suited to rural life.
“In these particular areas, you’re not going to see a lot of benefit for the amount of dollars you pay for that hybrid,” he said.
Hybrid electric vehicles are powered by a conventional engine with an electric motor. They are most efficient at lower speeds and are thus better suited to big-city driving.
“You’re looking at $4,000 more just to get into one of those,” Hagen said. “And you have to do a ton of driving at 40 miles an hour or less. In these rural areas out here, where you’re driving 55 and 65 miles an hour more than what you’re driving under 40, it would take so much longer for that to pay for itself.”
Impact on goods and services
The high cost of gas is also affecting costs and traffic at other businesses.
With more income required to fill the gas tank, consumers have less money to spend on discretionary purchases.
Nationally, florists have been hit hard as consumers have whittled flower purchases out of their budgets to pay for gasoline.
Carmen Jones, owner of Prairie Flower and Garden Shop in Hillsboro, said gas prices have affected her delivery costs, but she has not noticed in any cutback in spending for flowers.
“We’ve actually been pretty busy,” she said.
She is hopeful the higher gas prices will encourage consumers to spend their dollars at home.
“We try to make it easier for the customers to stay in town instead of going out of town to purchase,” she said.
Where gas prices have affected her business most is in delivery costs and increased costs from suppliers.
“They’re passing the prices on to me from my wholesalers, so I don’t really have much choice but to then pass it on to the customer,” she said. “I can’t suck up all that cost.”
Jones said she is also contemplating raising delivery prices because of higher gasoline costs.
“We’ve contemplated buying different vehicles that are more cost effective,” she said. “If we can cut back in any way, we try to do that so we can still be competitive.”
Spending an extra $50 a month on gas may require cutting costs elsewhere. For many families, dining out is a frequent target for cutbacks in spending.
Delora Alvarez, owner of Al’s Café in Lost Springs, said her restaurant has definitely felt the pinch of higher gas prices.
“It’s slowed down a lot,” she said.
For Alvarez, the increased gas prices pose a double whammy. Eating at Al’s is not only a discretionary expense, but it requires a drive to Lost Springs, using even more gas.
She has weathered many storms, and she plans to ride this one out, too.
“I really hate to see it, but I guess we’ll just hang in there,” she said. “I don’t know what else to do, because this is all I have, and I’ve got to keep going.”