Updated: Tuesday, Feb. 29, 2000 at 23:43 CST

Businesses, charities feel fuel price pinch By Renee C. Lee Star-Telegram Staff Writer

Terry and John Watters have managed to withstand at least one major gasoline price increase in the 20 years that they've owned their carpet cleaning service. But the couple isn't so sure about the latest rise in prices, which has forced them to look at ways to absorb the extra cost.

"We'll have to do tighter scheduling and probably raise prices," Terry Watters said yesterday from her Fort Worth business. "I'm trying to keep the cost factor down so we won't have to go up, but with another 30 to 40 cents increase, I have no other way to do it."

The Watterses aren't alone in their predicament. Businesses, schools, charities and day-care centers across the Metroplex say they are beginning to feel the pinch as they have watched fuel prices steadily climb during the past eight months.

"I think it's probably the worst I've seen it," said Gary Brown, general manager of Duncan Disposal Co., which provides trash collection services for Arlington and other cities in the Metroplex. "We've seen our fuel prices increase over 30 percent in the past few months. We went through it before but this is a greater impact because the prices are higher."

Brown said the company is negotiating with cities to add a temporary 3 percent fuel surcharge on services until the fuel prices drop. Other businesses plan to pass the extra cost to customers as well.

But some organizations don't have that luxury.

Charities such as Mission Metroplex in Arlington have two choices: cut back on services or receive more donations to cover the extra expense. The mission operates four vans six days a week to transport low- income residents and their children to and from work and day care. With people's livelihoods on the line, cutting back on service is not a step that mission Director Tillie Burgin wants to take.

"We have no plans to cut back," Burgin said. "I need somebody to give us a gas station."

School districts say that if fuel prices continue to increase, they will be forced to take money from other areas to cover the cost.

The Northwest school district in Justin operates a fleet of 60 buses that logs an average of 5,000 miles a day.

The state reimburses the district 79 cents a gallon, but right now wholesale diesel is costing the district 96 cents a gallon. The buses average nine miles to the gallon.

"That's the highest we've paid this year," said LaVonne Nowlin, the district's transportation supervisor.

The district usually pays between 56 and 85 cents a gallon, she said.

Arlington school district officials said the price increases haven't had much of effect yet. The district, which runs about 175 school buses, is paying about 85 cents a gallon for fuel, up 10 cents from January, said Betty Knox, who oversees fuel purchasing for the district.

Steve Brown, the district's associate superintendent for finance, said that if the prices continue to go up, the district will have to look at other areas in the budget to pay for the increased fuel costs.

Craig Depken, an economics professor at the University of Texas at Arlington, said rising oil prices inevitably create a trickle-down effect.

The person who takes the oil out of the ground sells the oil to a refinery, which sells it to a gas station, which then sells it to the consumer. Each time the product changes hands, the cost goes up, and the consumer is usually hit hardest, Depken said.

Larger companies, such as major airlines, are able to absorb the extra cost and maintain profit by raising prices quickly. When one company increases prices, generally others in the industry follow, he said.

For many airlines, fuel ranks second behind employee salaries as their largest expense. In 1999, American Airlines used more than 3 billion gallons of fuel, costing the company $1.7 billion, American Airlines spokesman John Hotard said.

"For every 1 cent that gasoline increases, it adds $30 million to the bottom line," he said. "In January of this year, we spent what we had projected to spend in the entire year."

Small-business owners say that even a slight increase in fuel costs has a big affect on their profits.

"With neighborhoods stretching out farther and farther, we are always using more gasoline," said William Dickinson, owner of Organic Solutions A-Quality, a Fort Worth lawn maintenance company. Dickinson said he is spending about $500 a month more than usual for fuel.

"Yesterday, I had to fill up twice, and I really felt the increase," he said.

Taxi drivers, who pay for gasoline out of their own pockets, fill their 15-gallon tanks about once a day, said Andrew James, spokesman for the Yellow and Checker Cab Co.

"Drivers say they are driving around looking for fares less," he said. "If they are paying almost $4 more per tank, they are not going to waste gas driving without a fare."

The Fort Worth Transportation Authority, on the other hand, hasn't been hurt much by the high fuel prices because its buses and vans use diesel fuel and compressed natural gas, General Manager John Bartosiewicz said.

If anything, Bartosiewicz said, the increase has caused ridership to increase. About 6 million people a year use the public transportation system in Fort Worth, he said.

On a lighter note, officials say spring break and summer vacation plans should remain unaffected by rising fuel costs.

"I don't think we've reached the point yet where the price point will keep people out of the car," said Lisa LeMaster, spokeswoman for Six Flags Over Texas. "Keep in mind that 80 percent of America lives within a two-hour drive of one of our theme parks."

Staff writers Rebeca Rodriguez, Jennifer Radcliffe, Sean Wood, Dan Piller and Ellena Fortner contributed to this report

http://www.star-telegram.com/news/doc/1047/1:ARL31/1:ARL310229100.html

-- Martin Thompson (mthom1927@aol.com), March 01, 2000