What do a township, a paving company, a transportation solutions provider and a gas station all have in common? They rely on petroleum, as do countless other industries.
And when the price of oil is up, it’s the consumers who pay — sometimes in unexpected ways.
Tim Barnard of Alliance drives approximately 350 to 450 miles per day in tractor-trailer trucks that get about 8 miles to the gallon, delivering as far away as Frederick, Md., for Girard-based Aim Transportation Solutions.
Barnard, who has logged 32 years on the road, said he can’t remember a time when gas — especially diesel, which fuels his tractor-trailer — has been this expensive. On Friday, a Pilot gas station near the Interstate 80 interchange in Austintown showed diesel at $5.359 per gallon.
While Aim’s truck drivers are racking up bigger price tags at the pump, Brandon Stieb, vice president of operations, said that extra cost more often than not gets passed to whomever is receiving the goods Aim is transporting.
“Ultimately, I think that who it affects the most is the consumers,” Stieb said.
Aim employs more than 1,200 people and transports goods in most midwestern states from Iowa to New York to Georgia, Stieb said.
Thanks to its full-service leasing division, integrated logistics division and maintenance division, Aim has the resources to weather the storm of challenges facing the unstable logistics industry — from equipment and labor shortages to the increase in operational expenses.
When it comes to transporting goods, though, there is a direct correlation between what Aim charges and the cost of fuel, Stieb said.
The national average price for a gallon of regular gasoline broke records on March 8, the same day President Joe Biden announced sanctions on the Russian energy sector in response to the country’s invasion of Ukraine a week and a half earlier.
The average price of gas in the U.S. was $4.17, beating July 2008’s record price of $4.11 — although the previous record is equal to about $5.30 today, according to the U.S. Bureau of Labor Statistics’ inflation calculator.
A week later, the national average hit $4.43.
As of Saturday, the national average had dropped to $4.26, according to AAA. A slight decrease in demand for gasoline from 8.96 million to 8.94 billion barrels per day contributed to the sinking price, but the recent reversal in oil prices is the main driver of the lower prices at the pump, an AAA release said.
It’s been a bumpy month for oil and gas prices and a far cry from the end of March 2020, when the early stages of the COVID-19 pandemic knocked gas prices in Ohio down to less than $2 per gallon.
It’s not just fuel that drives up consumer prices, though. Petroleum products include heating oil, jet fuel, waxes and lubricating oils, to name a few.
Petroleum also is a component of asphalt, so when the cost of a barrel goes up, the cost of blacktop also goes up, said Anthony Carl, owner of Niles-based Carl’s Paving, Inc., which serves Trumbull and Mahoning counties.
“We can get price increases on short notice. When the blacktop plant starts paying more for the liquid asphalt, we start paying more for the blacktop, and we have to pass that on to the customer,” Carl said.
He said when he started paving in 1988, a ton of asphalt was just more than $20. Now, a ton of asphalt is pushing $70, he said, which is close to the highest price he’s ever paid.
Considering there’s no way to predict the future, Carl makes a point of not booking jobs too far in advance so his estimates are more accurate.
“I just start telling everybody, ‘I’m already booked two months in advance. I can give you a guess on the price. Most likely with all that’s going on, I’m going to get more increases,’”Carl said.
Even when Carl adjusts his prices to reflect the changing price of asphalt, he said he still loses money when oil prices are high because he has to pay delivery surcharges that get tacked onto his shipments.
Anticipating rising oil costs, Howland director of public works Dave McCann increased his fuel allotment by 40 percent this year.
In 2021, the township public works department spent almost $29,000 on diesel and gas for its fleet. This year, McCann budgeted for $40,000.
Expecting the cost of asphalt to be up from last year, McCann also increased his budget for skin patching.
Township road department money comes from a gasoline fund from the state gas tax, the township’s portion of vehicle license fees and a percentage of property taxes.
Increasing the budget in some areas means decreasing it in others, and McCann said in this case, it means putting off buying equipment and paving fewer roads, “because it’s got to come from somewhere.”
“The fuel costs, they kind of dictate how much repair work you can actually get done,” McCann said.
On top of those rising costs, the road department could lose a portion of its funding if lawmakers pass a bill to suspend the state gas tax.
Senate Bill 277 would lower gas tax rates 10 cents to 28 cents per gallon, saving drivers $1.05 for every 10 gallons bought. The bill would cut the tax, along with additional registration fees for hybrid and electric vehicles, for five years.
McCann said that would take away about 50 percent of his gasoline fund.
Yasser Alsadi of Lordstown, the 18-year owner of Speed Check gas station on Tod Avenue, said he doesn’t like it when fuel prices go up either.
Alsadi greets everyone who comes into Speed Check and knows most of his customers by name. He feels bad when they wrack up big price tags at the pump, and their loss isn’t isn’t his gain — in fact, Alsadi said he makes less money when gas is expensive.
While the extra cost of the gas and diesel itself gets passed onto the customers, Alsadi said people tend to drive less when gas is expensive. He said he sells better and makes a higher profit when the price of gas is low.
The gas station also pays fees on credit card transactions, so “the more gas goes up, the more we spend on fees,” Alsadi said.
The Associated Press contributed to this story.