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Gas prices are higher, but manageable, say businesses

Gas prices have remained steady at just over $3 a gallon this past week, at their highest level since September of 2017, according to AAA East Central.

Higher gas prices affect everyone, but they especially hit industries that rely on people having disposable income and that do a lot of driving themselves.

A pizza restaurant would be a prime example, and yes, said Matt Marcks, general manager at Big Woody’s, a chain of six sports bars and pizza shops in the Lehigh Valley, he and his colleagues are watching the prices.

“If people are paying more to put gas in their cars, they have less money to come in here and eat,” Marcks said.

The chain saw a drop in business 10 years ago when gas prices last spiked above $3.50 a gallon.

And increases have an even bigger effect on delivery drivers.

“It impacts how much they have to pay out and how much they get to take home,” Marks said.

The chain charges a 10 percent delivery fee, which goes directly to drivers to cover expenses like gas, but he said that is a flat rate and doesn’t vary with the price of gas.

Marcks said the company hasn’t added any gas surcharges on delivery and doesn’t expect too, but if prices go too high, anyone in the delivery industry would have to consider the additional fees.

It’s difficult to say where prices are heading next, said Alberto La Madrid, a professor in Lehigh University’s College of Business. But he said the U.S. Energy Information Administration is predicting that gas will be cheaper this summer than last. So that’s good news.

He also said with so many factors involved, it’s hard to pinpoint exactly what has driven the recent spike in prices.

“Some possible reasons for the recent changes in the oil price are that the sanctions against Iran are decreasing the availability of oil, and Russian exports have been suspended,” he said.

But while it may hurt a bit to more at the pump, La Madrid said current prices shouldn’t be cause for too much concern.

“These kind of fluctuations are normal; airlines for example are very sensitive and they have sophisticated tools to deal with it,” he said.

So do many other industries that are impacted heavily by the fluctuating price of fuel.

Jennifer Lechiski, communications manager for Trans-Bridge Lines Inc., said the Bethlehem bus company keeps an eye out for fluctuations in gas prices and adapts accordingly.

“Even when gas prices are good we monitor them for our commuters,” she said. “We’re used to dealing with it.”

Most commuters buy tickets in advance. When fuel prices fluctuate, ticket prices go up and down accordingly.

She said the latest spike in gas prices led to a slight increase in prices for May.

The fare for 10 trips on the Allentown to New York route increased from $184.25 to $185.

But most daily fares – including the $63.75 round-trip fare from Allentown to New York’s Port Authority and the $39.90 round-trip adult fare from Allentown to Philadelphia – remain unchanged from previous months.

 

 

 

Stacy Wescoe
Writer and online editor Stacy Wescoe has her finger on the pulse of the business community in the Greater Lehigh Valley and keeps you up-to-date with technology and trends, plus what coworkers and competitors are talking about around the water cooler — and on social media. She can be reached at stacyw@lvb.com or 610-807-9619, ext. 4104. Follow her on Twitter and on Facebook.

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