'It's a pain we're all sharing': Gas roars past $5 per gallon

The price of gas has revved right past $5 per gallon in Lorain County. Sunoco on East Avenue in Elyria asked $5.04 for regular unleaded on Tuesday, while signs read $5.09 at BP and GetGo on East Bridge Street, Speedway on Griswold Road and Shell on Lorain Boulevard. BP, Amoco and Certified in Wellington on the southern end of the county all carried the $5.09 price point, as did BP and Speedway on the far north side in Avon Lake. BJ's Wholesale Club in Avon boasted the lowest price spotted in the county, at $4.66 per gallon. "It's eating into people's budgets," said Tony Gallo, president of the Lorain County Chamber of Commerce. "Everybody's dealing with this. It's a pain we're all sharing." For Zachary Nagy, who has delivered the past three years for Master Pizza in North Ridgeville, the situation has gone south. "It's definitely a struggle," he said — filling up his 2013 Chevy Malibu costs between $60 and $80 now, and tips are starting to dry up. The good news is that the restaurant pays for mileage, which helps, but a lot of nights Nagy has to dig into his tips to cover his gas. Master Pizza plans to help its drivers by buying two company cars and paying to keep them filled up, he said. Aaron Freas, owner of Sambino's Pizza in Elyria, said his drivers are having a hard time since gas passed the $4 per gallon mark earlier this year. He increased his delivery charge from $2.75 to $4 to compensate. "I can't continue to increase it forever," Freas said. "At some point, people won't pay any more." While Sambino's customers have stayed fairly loyal, he said that if he has to lift the fee again to $6 it will be the breaking point for many. About 75 percent of his business is delivery. But with prices rising sharply, Freas said he doesn't know how long he can remain fully staffed. He said keeping drivers will mean raising benefits and incentives, and that will eat away at his profit. There was no way for companies that pay mileage to know, when budgeting for 2022, that these kind of hikes were coming, said Gallo. Most suspected fuel prices would rise, but didn't suspect such a sharp jump. "I haven't heard of any say they're going to make their workers stay at home because it's too expensive to go to work — yet," he said. "For now, it's a kind of something uncomfortable we're going to have to deal with." His concern is the impact of shipping costs to grocery and big box stores. Higher gas prices are going to continue to be reflected on consumer price tags. Chuck Haslage, owner of Haslage Fleet Services in Lorain, has seen firsthand the effect of rising diesel costs. His trucks are running 1,000 to 2,000 miles per week, going through about 7,000 to 8,000 gallons in that window. "We have our own bulk tank and get better than average pricing, but still every day it goes up more," Haslage said. "It's out of control." There's only so much a company can eat, and only so much it can pass on to customers in the form of fuel surcharges, he said. "And the fact that it keeps increasing as fast as it has, it makes it hard to keep up," Haslage said. Kimberly Mason, chief operating officer of LifeCare Ambulance, said she anticipated a 5 percent or 6 percent bump in fuel prices when making the company's 2022 budget. Since April, LifeCare's fuel expenses have jumped 11 percent. That's big money when putting 35 to 40 trucks on the road each day. Last month, they racked up 87,332 miles for patients in Amherst, Elyria, Lorain, South Amherst, Vermilion and surrounding townships — that's expensive with a 98-cent increase at the pump. To compensate, LifeCare is no longer allowing trucks to idle when not being used. They're also required to be parked inside their bays to keep cooler, Mason said. Dispatchers also are working to consolidate trips to save gas. If they make a run to a Cleveland hospital, for example, they try to get another patient coming back instead of running empty. Mason said she's looking at other potential cost-saving measures, such as adding a gas fee for ambulance runs. By law, those charges can only be added in certain circumstances, though. Without some relief, LifeCare may have to halt transportation to specialized facilities in Youngstown, Canton and Columbus, she said. "It could become a problem if (the cost) keeps increasing, because it's going to affect where we can travel, and we don't want to do that," she said. "We want to get patients to where they need to go." Julie Cobb already has rolled back the amount of territory her Avon-based company, Jewlz Cleaning, covers. She used to be willing to drive or send cleaners to Erie County in the west and Cleveland in the east — "Now I've had to take not as far-out jobs, because it doesn't pay to drive too far anymore," Cobb said. When pump prices hit $4 per gallon, she upped hers to match. And though she's still willing to drive to Strongsville for certain jobs, she'll only do the trip once per week. If gas prices climb high enough, Cobb said she'll pull back her staff to only Lorain County destinations. Rick Hammond of R Hammond Construction has already taken that step. He said there's enough local work for his general contractor crew that they no longer need to incur the cost of driving across the entire region. His fuel bill has gone up by 35 percent in the last couple of months: "It means you try to become more efficient and not spin your wheels as much," Hammond said. "Try to get more delivered instead of picking it up. Try to do as much to save as you can." Nathan Joppeck said there's little he can do to control the toll of rising fuel costs. He owns Fair View Meadow Farm in Wellington, raising livestock. The cost of feed has increased about 20 percent this year, largely due to delivery. Joppeck said he tried to absorb the increases as long as possible, but finally had no choice but to pass them along. "It's not something we like to do, but if we want to stay in business it's necessary," he said. Gallo said gas affects every segment of the economy, from food trucks and restaurants to hotels and lumber. Across the board, products are getting smaller while prices remain flat or edge upward, he said. But most of all, he's worried about manufacturing. "I worry about our trading sector, the goods that are made here and sold somewhere else," Gallo said. "If the prices get raised on that, it doesn't necessarily affect us all day to day, because we're not all buying wheelchairs from Invacare right this minute. We're not getting tools from Ridge Tool right this minute. But that's money that's keeping the lights on for a lot of local businesses and their employees." Sky-high prices are also putting pressure on the nonprofits that help Lorain County's most vulnerable residents. Take Neighborhood Alliance, which is reeling from the higher cost of its home-delivered meals program. "You get so much for the meals as far as our funding on it, and no more. So you feel it," Chief Financial Officer Mark Charvat said. Gas costs $1.60 more per gallon on average than it did last June, he said. But demand is also up, which means keeping a fleet of Ford F-150s on the road four days a week, carrying thousands of meals. Neighborhood Alliance's finances are strong, Charvat said, but the speed at which gas prices have increased is a concern. And there's no way for the nonprofit to just raise its prices like a commercial business can. "We can ride it out short term, but long term, something obviously has to give," he said. "… It's not sustainable." Local governments are also swallowing the costs — which means taxpayers are. Amherst Mayor Mark Costilow undertook a review of the fuel budget Tuesday. In 2020, the city spent $94,710; in 2021 it spent $120,825; and this year receipts through May already total $69,816. Costilow said he budgeted $189,650 for this year. "I'm guessing we'll go over that," he said. The Amherst Police Department is the city's largest user. Last year, it used $53,000 for fuel, and this year has a budget of $75,000. Amherst workers are using an average of 400 gallons of gasoline every 10 days and 250 gallons of diesel every two weeks, Costilow said. The city's last purchase on May 25 was $4.36 per gallon for gas and $4.39 per gallon for diesel. Compare that to $2.26 per gallon in January 2019. When there's a theft, a domestic violence call, a fire, a water main break or power outage, the vehicles have to roll, he said. "We can't quit." What the city can do is cut down on routine driving. Costilow said he's asked workers not to drive around looking for potholes, houses where projects are being done without permits, stop signs that are crooked or catch basins that are covered. "We're making a conscious choice to have a purpose when we drive, not just driving around," he said. Lorain Mayor Jack Bradley said he met with department heads a couple months ago to brainstorm ways to cut gasoline use. Like LifeCare, he's ordered police officers to stop idling vehicles if they're going to sit for an extended amount of time, he said. Bradley said he's also talked with the Building Department about making inspection routes as lean and efficient as possible. Instead of bouncing back and forth across the entire city, schedules are being more strategically crafted, he said. Public Property Manager Lori Garcia is tasked with watching over the expenses of Lorain's fleet, which according to Safety Services Director Sanford Washington contains 379 police, fire, maintenance, utility and other official vehicles. Garcia works with a broker to buy bulk fuel when prices are the lowest, said Bradley. It's a tactic Lorain has employed for years. Analysts predict the pinch will get worse before it gets better. Since hitting $4.11 per gallon in March — breaking a record that had stood since 2008 — the national average has been creeping steadily upward. The average price for gasoline across Northeast Ohio rose by 38 cents in just the past week, according to AAA East Central. Compare that to a shockingly low $2.91 per gallon back on June 7, 2021. And prices are much higher elsewhere. While sitting at a national average of $4.86, the highest prices can be found in California, where drivers are filling up for $6.34 per gallon. Nevada residents are paying $5.49. They are among 10 states where the average has surged past the $5 mark. Others are Alaska, Arizona, Hawaii, Indiana, Michigan, Illinois, Oregon and Washington. Pump averages ranged Monday from $4.79 in Lorain to $4.88 in Cleveland and Independence. AAA said the rising cost of crude oil is to blame, along with the usual seasonal trends. A barrel of oil is nearing $120, nearly double from last August, because demand far outpaces what oil makers are producing. Domestic gasoline stocks are slowly being used up, according to the Energy Information Administration. Last week, they decreased by 700,000 barrels, with 219 million barrels in reserve. "Coupled with volatile crude oil prices, pump prices will likely remain elevated as long as demand grows and supply remains tight," AAA's analysis said. While the United States uses very little crude oil from Russia, disruptions resulting from its invasion of Ukraine have taken a hard toll on the gas supply of Europe and China. That's bitten into the global commodity markets, skewing prices here. But the biggest issue has been underproduction. OPEC and its allies cut the amount of oil they were producing during the worst parts of the pandemic, when demand fell drastically, and now that drivers have hit the roads again in high volume, those producers have not kept pace. The result is low supply and high demand, so customers are paying the price. President Joe Biden has been touting his job creation numbers — his White House has seen 8.7 million new jobs, four times all those created in the last 16 years combined — but hasn't been able to come up with an answer for the gas price problem going into midterm elections. On June 1, he said there wasn't much he could do to lower gas costs right away: "There's a lot going on right now, but the idea we're going to be able to click a switch, bring down the cost of gasoline, is not likely in the near term." That's led to increasing economic pessimism. The Gallup Economic Confidence Index, a phone survey that's been running since 1992, has been steeply falling over the past three months, signaling Americans are losing faith in the future. Only 14 percent of U.S. adults say economic conditions are either "excellent" or "good," it found. Another 39 percent say they are "fair," and 46 percent say they are "poor." The winners are the oil companies themselves. They've been raking in record profits totaling $93.3 billion. In its first quarter disclosures, Shell showed it made $9.1 billion in profit, which is nearly three times what it make in the same period last year. Exxon made $8.8 billion in profit, also a nearly 300 percent increase. Chevron reported its profits jumped $6.5 billion, and BP raked in $6.2 billion, its highest margin in 10 years. "Oil executives should not be able to profit off everyone else's financial pain as their companies earn record profits," said an analysis by the Center for American Progress, a nonpartisan policy institute. "Congress must provide some relief to consumers — and hold oil companies accountable." It said Congress should tackle high gas prices by directing the Federal Trade Commission to investigate price gouging, adopting a use-it-or-lose-it policy for drilling on public lands and implementing a windfall profits tax. "Oil and gas corporations and the trade groups they fund to lobby on their behalf would have people believe that they need access to more places to drill, better market signals and fewer regulations in order to make the investments needed to help lower prices," the CAP analysis said. "But the truth is that they are flush with the cash that could be used to make those very investments — a fact they are not even trying to hide." Contact Jason Hawk at (440) 329-7122 or news@lcnewspapers.com.