Gas Prices Seep Through Local Economy
In Austin, gas prices have jumped since Hurricane Isaac disrupted oil refining along the Gulf Coast. And local businesses are feeling the effects, but not always how you might think.
Even before Hurricane Isaac rolled into Louisiana, Austin gas prices had been steadily increasing. Now at $3.66 a gallon on average, gas costs are cutting into wallets all over town. For many businesses, that means dented profit margins.
Chuck Thorpe, CEO of DoubleDave’s Pizzaworks, said that last week the company brainstormed ideas for saving on fuel costs during pizza deliveries.
“I think it’s proven that we can save fuel and increase our miles per gallon if we drive more conservatively,” Thorpe said. “Pairing maybe two deliveries going out the door with one driver instead of just one delivery might help us as well.”
Passing the buck to the consumer, he said, is their last option.
“We would do everything in our power internally, from an education standpoint, to increase our efficiencies before we just haphazardly put a price increase in our menu because gas prices are up,” he said.
Then there are the businesses that see a benefit to higher gas prices. Angie Prescott, co-owner of Freewheeling Bicycles, says that bike sales have increased 12 percent since last year. The company just had its best August sales in seven years.
“What we’ve discovered is that when there is a gas spike that we do sell more bikes, we do more repairs, people want to metaphorically put their cars up on blocks and start commuting, start doing short trips and errands by bicycle,” Prescott said.
Four dollars a gallon is the game-changing price, she says.
“As it starts to approach $4, we get in the high $3.80s, people start to think about bicycling more,” she said.
But Prescott isn’t holding her breath for that magic number. The Oil Price Information Service says that gas prices should start to creep back downward as early as this week.