Gas costs trigger surcharges

BANGOR – The rising price of gasoline in Maine – up an average of 15 cents a gallon in less than two weeks – is having a trickle-down effect on the state’s economy as businesses try to recoup their increased fuel costs by adding a “fuel surcharge” to their invoices.

From package deliverers to uniform companies to auto parts stores to garbage collectors, more and more businesses are following a national trend that started with airlines and charging a few dollars more to cover the cost of bringing their products to market.

It’s a way to not actually raise the cost of the products they sell, but to cover the cost of delivering them. The beauty of it is that if gasoline prices go down, the surcharge comes off the invoice, said Jim Barrett, an energy specialist with the Economic Policy Institute in Washington, D.C.

But besides that, using the phrase “fuel surcharge” is a clever way for businesses to show their clients that they didn’t want to raise their prices, but that the oil companies made them do it.

“By doing that, they’re deflecting the blame from themselves,” Barrett said.

Rob Baker, owner of Rob’s Exxon on Broadway, was surprised to see the charge on two separate invoices recently for garbage pickup and uniform cleaning.

Unfortunately, he said, those fuel surcharges will have to be passed along to his customers at the pumps.

Everyday Baker fields the same questions from his customers – “Is it ever going to stop? How high are they going to go?”

In the last two weeks, however, as gasoline prices spiked to $1.599 per gallon for regular unleaded, Baker has been asked another question.

“‘How come the price is going up so fast?’ I hear that from customers, too,” Baker said. He tells them, “Because my cost is going up.”

At Green Point Auto Parts in Brewer, fuel surcharges are being passed along to service stations because the supplier is being charged such a surcharge from shipping companies delivering their used parts, said salesperson Dwight Smith. His customers don’t like it.

“We’re in that type of business,” Smith said. “Everybody’s complaining.”

More and more small businesses statewide are having to incorporate fuel surcharges into the prices they charge consumers, said Chris Hall, vice president of the Maine State Chamber of Commerce.

“Sometimes you have to do that because you haven’t budgeted for the cost,” Hall said.

“If they are able to pass those costs along, it will ease what they are feeling,” said Laurie Lachance, the state’s economist with the State Planning Office. “Ultimately, it will end up with the consumer, as it always does. The consumer will have choices to make.”

So far, most Maine shoppers aren’t drastically cutting back on their spending, Lachance said, noting that people continue to buy bigger, gas guzzling cars and trucks.

But if gasoline prices continue to go up, as they are expected to – “and it’s not even tourist season yet” – then consumers may not drive those cars as far on leisure trips, she said. Many Mainers, however, will be spending more to drive to work since many people drive more than a half-hour to their jobs daily.

“The decision becomes how much to use that vehicle,” Lachance said.

For Paul Marston, who works in the home health care business, rising gasoline prices are limiting the number of trips he takes to one of his offices in Yarmouth.

“I’m not going down there that much,” Marston said after filling his gas tank in Bangor Tuesday. “I’ll find another way to do it [conduct business].”

Meanwhile at Baker’s Exxon station, people still are buying as much gas.

“I haven’t seen a decrease in my gallons,” Baker said.

If people start driving less, it may mean fewer auto repairs, the bread and butter of Baker’s business. He said he’s hoping prices will stabilize soon.

“I’m a little nervous, sure,” Baker said. “Nothing will slow the economy faster than high gas prices.”