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Diesel price could drive up costs

Some local business owners might charge customers more if diesel prices continue to rise.
Tuesday, March 23, 2004 | 12:00 a.m. CST; updated 3:10 p.m. CDT, Tuesday, July 1, 2008

For drivers, rising gas prices can be a financial pain, but jumps in prices at the pump could hurt consumers in more ways than one.

If oil prices continue to stay at about $38 a barrel, diesel prices will remain high, experts say. In response, shipping and transportation companies are passing the additional cost on to consumers, according to Jake Bournazian, the economist for the Energy Information Administration, a branch of the Department of Energy.

In Columbia, waste hauling, towing and transportation companies are feeling pinched by high prices. Although owners of those companies say they haven’t yet had to pass on costs to consumers, they might have to in the coming months.

Nationwide, diesel prices are at about $1.64 a gallon, a few cents less than they were at the same time last year, but increasing nonetheless, said Mike Russell, spokesman for the American Trucking Association. Unleaded gas prices in Columbia rose 9 cents Monday to $1.66 per gallon. Bournazian said nationwide gas prices are expected to reach a record-high average of $1.80 this spring.

Columbia business owners have noticed diesel costs rising steadily by a dime in the past three months, and by about 40 cents since last fall.

One business owner reported spending $1.54 a gallon at a location north of Columbia on Rangeline Street on Monday.

Laura Turner, a co-owner of waste pick-up company Blackjack Hauling, said that two years ago, her company hiked its price per customer by about $1 per month.

“I don’t look for myself to do that this year, not unless they go crazy,” she said of prices. “Going crazy would be over $2 a gallon.”

Dale Payne, owner of A.J.’s Towing, said with six trucks, two of which are big enough for towing large vehicles like concrete mixers and loaded tractor trailers and cost $300 to fuel, he knows his business has felt the increase. If diesel prices drift to $1.65 or $1.70 per gallon, he’d need to start slapping surcharges on his towing runs, he said.

“For the most part, yeah, the price of fuel will definitely have to be passed on to the consumer,” he said.

The last time MoX Shuttle Service had to raise prices was also about two years ago, and they went up by about $3 per round-trip and $2 per one-way trip to and from Kansas City and St. Louis airports, owner Brent Moore said.

He said his business is currently “sucking up” the price of diesel, but he said, “If it continues to grow, sure we’re going to pass the cost down where someone is going to eventually pay for it.”


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