There’s a chart on Waste Management’s site where customers in the Mid-Atlantic region can visit and see how their bills have increased in relation to gas prices.
Based on fuel prices right now, consumers can expect about a 15 percent surcharge and their bills, and that’s about two percentage points higher than last year.
“The way we handle fuel increases is when they go up, the surcharge goes up; when they come down, the surcharge goes down,” said Lynn Brown, a Waste Management spokeswoman.
Waste Management’s Brown said the company decided to post the updates and a chart of surcharges on the site in 2008 because “we want our customers to understand” how gas prices influence rates.
The rising cost of trash disposal is just one by-product of escalating fuel costs in the United States, and consumers across the country will be feeling it in their pockets beyond just filling up their tanks. Costs for everything from airline tickets to food go up when energy costs rise, and Delaware will be among the hardest hit states in the country, according to economists.
[caption id="" align="alignright" width="300" caption="Many of Delaware's highest and lowest gas prices currently are found at stations like these in the Newark/Glasgow area."]
California and the Mid-Atlantic and Northeast regions have seen the largest fuel cost increases in the last couple of months—above average, said Juan Pablo Fuentes, an economist who covers energy for Moody’s in West Chester, PA. “The closure of several refineries in this area” he said, is driving the uptick. And he expects things to get even worse if the Sunoco refinery shuts down.
Sunoco, Inc. announced this past September that it began the process to sell its refineries in Philadelphia and Marcus Hook, PA, and the company said if it’s unable to find a buyer it would close down the facilities in July.
The immediate impact of escalating energy prices is seen in anything related to transportation, Fuentes explained, such as Fed Ex, bus rides and airfares. The increase has more of an indirect impact on consumer products, particularly food, he said. The rise in food prices, he added, would depend on where the food is coming from. For example, there is a higher likelihood that food shipped from aboard into the region’s ports will increase in cost, while produce from local farms and processors may be more affordable.
“Rising gas prices are on everyone’s radar screen,” said Judy Diogo, president of the Central Delaware Chamber of Commerce in Dover. “Transportation is something we pretty much all have to do in the state of Delaware because there isn’t a huge transportation system.”
On the business side, she said, companies that rely on people being in their vehicle, including service and delivery people, feel the impact first, “and sooner or later they pass the increase on to consumers.”
[caption id="" align="alignright" width="300" caption="Charting Delaware and National gas price averages."]
If gas prices continue to escalate, she added, “We are going to see it affecting businesses in an extreme fashion.”
There are mixed reports on how high gas prices will climb.
Michael Driscoll, a visiting professor and senior executive-in-residence with the Adelphi University Robert B. Willumstad School of Business, Garden City, NY, said he expects prices to come down. He believes this recent spike is more tied to the typical increase in fuel prices ahead of the summer driving season.
Driscoll also said the impact of rising fuel costs won’t hurt consumer spending that much because the winter was so mild, customers ended up paying less overall for heat.
Fuentas, on the other, said, “I think it’s safe to say gas prices will keep going up for the next month or so. Last year, gas prices peaked by mid May and then started to decline.”
That’s bad news for Delawareans who are starting to make vacation plans. Flights for the summer leaving Philadelphia International Airport have already started to rise.
For example, a roundtrip, non-stop ticket on US Airways from Philadelphia to Rome was about $1,200 in January, but is now about $1,600 for travel in June. US Airways spokesman Todd Lehmacher said the company doesn’t comment on pricing decisions in specific markets; but he also said that fuel costs represent a huge chunk of the company’s expenses, about 27 percent of the total last year. “For every penny increase in a gallon of fuel, it takes our costs up $14.3 million,” he explained.
Even airport shuttles will cost more. Gerry Frenze, a spokesman for Delaware Express, a shuttle service based in Newark, said prices for the service are up about three percent over last year, and if gas prices climb above $4 a gallon, the surcharge could go up another one percent.
The biggest increase in prices, he added, has hit the company’s motor coach bus service, which makes short and long trips from the state because those vehicles only get five miles to the gallon. If a group charters a bus for a six-day trip to Florida from Delaware for a cost of $8,000, the price could include as much as an $800 surcharge.
Both Delaware Express and Waste Management, among many other businesses, tie prices for services to fuel prices tracked on the U.S. Energy Information Administration’s “Gasoline and Diesel Fuel Update.” Consumers can see updates on what their financial future may hold in real time by following the fluctuations of regular gasoline prices on the site.
The rising fuel prices have actually had a silver lining for businesses such as Delaware Express. The company has seen a ten percent increase in business, year after year, and that’s partly due to more consumers opting to take motor coach buses instead of driving themselves or flying, Frenze explained.
A trip to New York from Delaware could cost about $100 round trip because of high gas prices, while a bus ride is $54 roundtrip, he pointed out.
Another piece of good news for Delaware commuters is that Amtrak has not raised fares on its services in the region because of gas prices, said Danelle Hunter, media relations manager for Amtrak. When asked whether the rail company has plans to raise prices if gas costs continued to rise, she said, “We do not have plans to raise fares at this time.”
