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A big price to pay beyond the pump

Thursday, May 8, 2008

Gas prices are on the rise and the effects are being seen throughout the county.

Transportation plays a major role in all aspects of life including those that help Fulton County function efficiently. With gas prices rising regularly and the future of the increases unknown, many people are wondering what will have to change for Fulton County to stay financially stable.

Ann Hines, director of the Organization of Arkansas Oil Marketers, explained how oil prices around the country affect our local communities.

Crude oil, oil before it is refined and transported to gas stations to be pumped into gas tanks, is being sold at $115 a barrel. In correlation with this price, the price per gallon is $2.74. Additional costs are incurred when federal taxes (18.4 cents a gallon), state taxes (21.5 cents a gallon) and environmental taxes implemented in the last year (3/10 of a cent per gallon) are tacked on to that crude oil price, according to Hines.

"You still haven't refined it, you still haven't sent it down the pipeline, you still haven't transported it and you surely haven't paid the dealers," Hines explained. "I never thought we would see $4 a gallon, and I keep hoping that we won't since it's never happened before. I'm not sure what the effects will be."

These prices are being reflected from local gas station signs and in the pocketbooks of citizens, businesses and many necessary state, federal and county services.

Among those affected is the Fulton County Sheriff's Office which has already began making minor changes in order to accommodate rising prices.

The Salem School District has also began making budget adjustments and is planning on more in the near future, while the Fulton County Hospital ambulance service has gained an additional financial problem that leaves its future unsure.



The price to feed and transport local students has risen over $21,000 during the 2007-2008 school year due to the rising gas prices.

Superintendent of Salem School District Ken Rich said the schools have spent more on food and fuel so far this year than they have in any past school year. Based on the "fuel surcharge" added on several of the school's food bills by certain companies, Rich speculates that Salem School District's increased food costs are simply a snowball effect of what's going on around the country.

"The companies we buy from have to pay more for gas prices and some are raising the price of food and some are charging a fuel surcharge," Rich explained.

During the 2006-2007 school year, Salem School District spent around $190,000 on food to feed their students. This year they have already spent $210,000 with almost a month of school left to go.

Although, according to Rich, the food costs are currently the district's biggest budget problem, the school's transportation system has not been untouched.

"We did project that prices would increase; therefore, we raised our budget," Rich said with concern to the transportation budget.

The increase of fuel by $1.24 per gallon since August of 2007 is now costing the schools nearly $130 dollars a day to run their buses and other forms of transportation.

"We've already spent more this year than last year, and the school year's not even over," Rich said.

Salem School District budgeted $78,000 for transportation for the 2007-2008 school year and has spent $51,000 as of April 15. For the 2006-2007 school year they budgeted $77,000 and only $50,000 was spent.

With fuel prices continuing to rise, Rich said he is thankful the district has not had to implement drastic changes in its budgeting system.

"As of now, we have not had to cancel any (fieldtrips or away games). We can basically only keep watching and being prepared," Rich said.


Fulton County Hospital ambulance service now has the burden of rising gas prices to add to an already existent financial instability.

Bubba Shaw, the Fulton County Hospital ambulance service's supervisor said the service used to think $3 per gallon was terrible and never imagined gas prices would rise this much, this quickly.

Fortunately for the hospital's budget, the ambulance service switched to a new, more fuel efficient ambulance almost three years ago. Due to this change, as of now, the hospital is seeing only minor strain caused by gas prices. With the financial situations the hospital is already facing, even a minor strain may quickly turn into something much more serious.

"Anything that increases our costs makes it worse," Shaw said. "It creates a burden for not just us but all ambulance services."

The new ambulances are called a Sprinter, and with a five cylinder, 94 horsepower Mercedes engine, the ambulances get from 21 to 24 miles per gallon. After switching to these new ambulances, the hospital saved enough money the first year to make a payment on the ambulances, according to Shaw.

There are other stipulations that ambulance drivers and supervisors must follow to run an efficient and successful ambulance service, some of which include idling the ambulances. Shaw explained how one of these stipulations is not turning off the ambulance when out on a call.

"If you turn (the ambulance) off, there's a chance it won't start back up. We can't take that chance," Shaw said.

Shaw also said that although this may seem like a large burden, the engines don't use much fuel when idling.

The Fulton County Ambulance Service's success is in many ways based on the accessibility of affordable diesel fuel, and with gas prices estimated to reach $4 per gallon this summer, Shaw said they are just going to have to make necessary adjustments.

"We're surviving. We do things as efficiently as we can," Shaw said.

Sheriff's Department

The Fulton County Sheriff's Department is feeling the pinch at the pump as gas prices reach record highs both in the international crude trade and at the local pump.

According to Fulton County Sheriff Walter Dillinger, deputies are doubling up in patrol cars to save on gas. "The downfall is if we get a call and they have to go separate ways," Dillinger said.

The deputies face a challenge when two officers in the same car are responding to a call and then dispatch radios for response to an alternate location.

"The officers never complain when they have to come back in to go. These boys are real good about that," Dillinger said.

The Fulton County Quorum court sets the fuel budget for the year and Dillinger said he expects to exceed the current budget.

According to Dillinger the Salem Police Department has already cut fuel consumption down to one tank a week for each police vehicle.

One way Dillinger said he is cutting fuel cost is by being picky about collecting warrants. "Like if it is a $150 bond on failure to pay fines and they are picked up in Fayetteville we just set them a court date, but if it is a felony warrant we go get them everytime," Dillinger said.

Although fuel prices are weighing on the department, Dillinger said nothing would hinder the sheriff's department from serving the people of Fulton County.


THAYER -- Like everyone else in the country, people living in the Mammoth Spring/Oregon County area are wondering when and if the price of gas and diesel is going to go down.

Transportation plays a major role in the everyday lives of most people in rural America. Many in the area have to travel 20 to 30 miles and sometimes more, one way, just to get to work.

Then there are those that make a living hauling goods from one area of the nation to another. These small, locally owned companies are feeling the pinch and struggling to keep their big-rigs rolling.

U.S. retail fuel prices continued to soar into uncharted territory last week, as the average price of diesel jumped another 8.4 cents to $4.143 a gallon and gasoline gained 11.9 cents to $3.508, the Department of Energy reported.

This has seriously affected some local businesses.

Steed Brothers Trucking is located on Nettelton Avenue in Thayer. It is owned by Kevin Steed and has been in business since 1988.

"Diesel prices have drastically affected our business," said Kevin's twin brother Kelly.

The company runs eight, 18-wheeler's across the midwest. "We are not making any money. What our company might have considered luxuries is a thing of the past," Steed said. He said in the past they had an employee who washed and serviced their trucks. "I'm doing that now. I grease the trucks and change the oil," he said.

Steed said his company uses the Internet a lot to find the cheapest fuel prices. "If we have a truck in a certain area we check on-line and relay the cheapest price in that area on to the driver," he said.

"It's been a real crunch on us. We are fortunate that we have worked with some good suppliers. Ultimately consumers are going to pay," Steed said.

He said this is not something that has happened just the last few months in his business, but the last few years.

"Two years ago we were probably paying an average of $2.75 a gallon for diesel. Now it's over $4 a gallon. We are seeing a lot of companies our size going under every day," he said.

Steed said he can remember when diesel hit $3 a gallon. He said he is amazed their company is still in business.

"It's been a hard deal. We are really having to watch our P's and Q's," he said.

Dill's Trucking is located on Front Street in Thayer. It is owned by Alice Dills and has been in business for 20 years.

Office manager/dispatcher Sherry King said they run eight big rigs up the middle of the country, mostly north and south.

"Diesel prices have put the squeeze on us. They have made it tough on all aspects of our business," King said.

Dills said high diesel prices is taking what little profit they were making before. "I just keep thinking something is going to have to happen soon to bring these prices down," she said.

Dills said 80 percent of the goods across the United States are shipped by trucks.

"Some people say use trains. Well, that's fine but trains can't back up to Wal-Mart or the grocery store. The trucks are needed," King said.

She said her company hauls a lot of frozen food, and unprocessed meat, chicken and turkey.

"In the past, dead heading (going to pick up a load empty) was no big deal. Now, with higher fuel prices we try to hunt loads to haul close to our pick up or drop off sites," King said.

She said fuel prices are hurting a lot of people. "There are many owners/operators parking their trucks because they simply can't buy the fuel," she said.

Cover Lumber Company located on Front Street in Thayer also feels the crunch.

Cover Lumber store manager Curtis Poulette said Covers has five semis on the road and four local delivery trucks.

Poulette said higher fuel prices has affected his business. "We have to pass fuel prices on to our customers. Now we are seeing shipments to our company coming in late because people are parking their trucks and there just isn't enough haulers," he said.

Poulette said the high fuel prices are going to affect individuals also, not just Cover Lumber Company. "Lumber is cheaper than it has been in a long time. We are just having a hard time getting materials here. We are just trying to operate," he said.

Tom Kloza, chief analyst at the Oil Price Information Service said it is all about the runaway train that is also known as the crude oil market.

He said global traders are buying diesel at a premium because they believe "diesel is the great growth product of this century, and developing countries need diesel to drive their economies."

"Worldwide demand for diesel fuel and other fuel oils has been increasing steadily with strong demands in China, Europe and the U.S., putting more pressure on the tight global refining capacity," Kloza said.

Diesel is also 88.4 cents higher than it was in January. That means a trucker last week had to pay $176.80 more to buy 200 gallons of diesel than he would have paid in early 2008.

Diesel and gasoline prices are up in every section of the country since January.

Kelly Steed summed up the fuel situation by saying "Consumers beware."

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