Published: November 28, 2008 10:23 pm      

Drop in gas prices not a benefit to all

DANVILLE — Dropping fuel prices are a boon to the consumer, but not the ray of sunshine expected for many local business owners.

Gas prices have dropped to totals not seen in a few years, as the price at the pump has dropped well below the $2 mark per gallon, ranging between $1.65 and $1.75 earlier this week. Like most holidays, prices did jump in anticipation of Thanksgiving holiday travel.

But the fuel price drop is almost one-sided. While gas moves downward by jumps, the price of diesel is taking a much conservative route. Recent prices in Danville averaged just under $2.90 per gallon earlier this week.

And grocery stores are dealing with the slow drop. Bob Porth, manager of Jerry’s IGA in Hoopeston, said suppliers haven’t dropped the surcharges added on to deliveries a few years ago with the original fuel increases.

The flat charge, as much as $20, wasn’t detrimental coming from the large supplies.

“But the smaller guys that do $10 for cases, (the surcharge) did have some effect on that,” Porth said. “We had to buy heavy and carry inventory longer.”

At Price-Less Foods in Danville, manager Mark Elliott said he has seen surcharges as a result of the slow drop of diesel, but understands the reasons.

“A lot of it stems from a lot of the cost doing business,” he said.

Elliott pointed out that while the slow diesel drop is costing businesses like his money, there’s another side to the fuel pricing that may cause more of a dent in profits for local establishments. With gas prices topping the $4 mark, people were less eager to drive.

“When the prices were higher, that helped out business more,” Elliott said. “That kept people from going to Champaign or elsewhere.

“Now, as they’ve dropped” people may be willing to drive to out of county competitors, he said.

Not every grocer is deal with the surcharges, however. Matt Smith, manager at County Market at the Village Mall on North Vermilion Street, said a number of the surcharges have been dropped — some at the decision of the provider and others at his request.

The charges, which at times seemed low, can accumulate quickly for a business.

“We’re not getting charged a huge amount,” he said. “Some were just $3 a trip, but over a year that’s a lot.”

Even at the Public Safety Building, surcharges still are part of the menu as Sheriff Pat Hartshorn reports little drops in the price of bulk food and a lot of surcharges remaining on deliveries.

Some areas of retail aren’t the only ones waiting for the other shoe to drop in terms of fuel prices. City, county and township highway departments all are working with drastically higher prices with no sign of a drop.

“We benefit from fuel use as far as gas and diesel for our vehicles,” said Doug Staske, highway engineer for Vermilion County. “But on the construction side, where oil is the basis for seal coat and asphalt work we haven’t seen a reduction in prices.”

The same is true for townships in the county. Grant Township Road Commissioner Gary Weinard said he expects items such as cold patch to seal the roads and other asphalt products could even go up in 2009 — as much as 40 percent, perhaps.

If crude oil prices stay down in the range of $50-$60 a barrel, the asphalt products may inch down themselves.

“But the budgets for fuel for maintaining roads and blowing snow are getting a bit of relief now,” Weinard said.

Just getting through the first few months of the fiscal year has been tough on the City of Danville’s Public Works Department. Director Doug Ahrens said costs up to this point have forced his department to use almost 90 percent of the allotted funds.

As an example, asphalt overlay prices for the city have almost doubled just between last year and this year.

“At this point, regardless of how inexpensive diesel gets, there will be a need for adjustments,” he said.