Price hikes spell trouble
As gas prices slowly approach $4 a gallon, concerns that the cost of oil could dent an already fragile market also rise.
“It’s really bad; people are still making the same salary and paying more and more for gas, so we cut out other things like going out to eat and that ends up hurting other businesses,” Rio Pinar resident Jerry Ross said.
“And the more you cry about it, it seems like the tighter they (oil companies) turn the screw; I don’t think any of them have an idea of what the average consumer is going through.”
Although some are blaming the tensions in Libya for this recent increase, Sean Snaith, director of the UCF Institute for Economic Competitiveness, said the country only makes up a small percentage of the U.S. oil market. Conflict in Libya will not drastically affect the market unless the crisis spills over into other countries that are larger oil producers, such as Saudi Arabia.
Prices were already rising last month when Florida Gov. Rick Scott killed a plan for a high-speed rail line from Orlando to Tampa, opting instead to pour money into revamping the state’s ports. He will decide in July whether plans for the SunRail commuter train will move forward.
With gas prices rising and a lack of alternative transportation, Snaith said the pinch at the pump will likely be passed onto small businesses.
“For some businesses, gasoline is an influx; it’s one of the things they have to buy, so the impact on those businesses as they see costs go up will be whether they can pass that along to their customers, and they will probably go down if they can’t,” Snaith said. “But for consumers in general, it typically means there’s less money available to spend on other things besides gasoline.”
Avalon Park’s Unique Linens and Floral co-owner Ravi Hariprasad said prices at the pump have affected his business.
“We are not getting the revenue that we are supposed to get,” he said. “The incoming is a lot less than the outgoing.”
Local residents are also feeling the crunch of gas on the rise and are worried about how high prices will go.
“They say they are going to go up to $5 a gallon by summer — this is ridiculous; it’s really getting out of control,” Avalon Park resident Karen Best said. “We won’t be able to do those things that we want to do because of the gas prices.”
Ross said although he also worries about the cost of gas continuing to rise, he doesn’t foresee trading in his Lincoln Navigator any time soon.
“It’s not worth much now; no one’s going to give me anything for it now, because everyone’s in the same predicament,” he said. “I’m basically stuck with it; I’ll just have to continue to drive it less and less.”
Snaith said that even if businesses are faring well despite fuel follies, higher prices could negatively affect consumer confidence in general.
“We saw that pretty dramatically in 2008 when we saw the spike in the price of oil,” Snaith said. “But I don’t think we will see a similar spike.”
Some residents are already planning on spending less to compensate for the money they’re dumping into their fuel tanks.
“With gas prices the way they are, we just don’t go out as much,” Ross said. “It may get to the point that I have to start taking my bike to the grocery store; it’s really bad.”