Painful pricing

by Carla Knapp
Pharos-Tribune associate editor

May 25, 2008 12:24 am

— With prices for gasoline, food and other necessities soaring, Norm Truax knows the difficult choices currently facing many local residents in middle- to low-income households.
As the co-owner and operator of Logan Tire Service Inc. in Logansport, Truax himself has been dealing first-hand with rising oil costs and he sees how the rising prices at auto service shops and gas stations around town are affecting the customers.
“As money gets more in a bind, tires suffer, maintenance suffers and other things,” said Truax, who has been in the auto service business for 30 years. “Younger people especially don’t have that extra dollar a gallon to spend on gas. Then you’ve got a loaf of bread that’s $2.50 and milk that’s pushing $3 — people are really getting hurt. Necessities have just skyrocketed and sometimes your vehicle has to sit back and be the last thing worked on.”
Unfortunately, Truax says, car owners can be hurting themselves by letting the maintenance go on their vehicles. Proper maintenance can have a huge impact not only on a car’s fuel economy but also its life expectancy.
Despite increasing costs at the pump, Truax said his shop hasn’t seen much of a decrease in patronage because his customers know the value of keeping their cars in good running condition. Though he said he has seen some customers less, he believes it is because people are driving less.
“It’s slowing down just because the money is not there to go out and drive,” said Truax. “Food is higher, gas is higher and food comes first. But we’ve had some increase in steadiness of business because people are keeping their cars longer and they’re taking better care knowing they’re not going to go out and spend $30,000 for a new car.”
But even the owners of well-maintained vehicles are feeling the pain at the pump.
Prices in Indiana are currently slightly above the national average of $3.92 per gallon, according to indianagasprices.com.
The highest fuel prices in the country last week were in Alaska, California and Hawaii, where prices have reached $4.16 and above for a gallon of regular unleaded fuel. Drivers in Arizona and Wyoming are seeing the lowest prices in the country, where fuel is still below $3.70.
The Indiana average for a gallon of regular unleaded fuel, which has increased roughly 80 cents since early March, was $4.01 last week. But Franklin, Dubois and Putnam counties along with several others near Chicago are selling at $4.08 to $4.10 a gallon. Fountain County is the only one in the state selling regular unleaded at the national average price.
Despite the high prices, Staci Schneider, the chief communications officer and press secretary for the Indiana Attorney General’s office, said the tip lines are receiving fewer consumer complaints than in the past.
“I think it’s due to the fact that there’s more information out there and more education about the overall issue,” said Schneider. “The last I had heard, we maybe had 10 complaints last month. The level really has not been very high.”
Schneider said inquiries are made when the office does receive complaints, and investigations by Indiana Attorney General Steve Carter since Sept. 11, 2001 have resulted in $32,000 in refunds from 58 gas stations statewide. Most recently, Carter completed an investigation in March about excessive pricing at three Hendricks County gas stations and issued refunds to customers.
Such investigations, according to a press release from Carter’s office, have helped to keep Indiana’s prices in line with the national market. But crude oil prices along with taxes, production and distribution costs have all increased significantly in the past few years, driving up the consumer’s cost at the pump.
Only 50 percent of the price consumers pay for a gallon of gas goes toward crude oil prices, according to the Indiana Attorney General. Additionally, 28 percent of the price goes toward refining costs, 8 percent is for distribution and marketing and 14 percent is for taxes. The 14 percent, or currently about 56 cents, that goes toward taxes are split nearly equally between state excise tax, other state taxes and fees and federal tax.
But price increases are not just hurting people at the pumps as costs for things like motor oil, antifreeze and tires as well as certain maintenance costs have also increased.
“All of that stuff is going sky high because of the fuel crisis,” said Truax.
As consumers look for relief, certain groups like the Alliance to Save Energy have launched initiatives to help people save. The group’s Web site, www.drivesmarterchallenge.org, offers auto-specific tips on how to save money annually by increasing driving efficiency.
Suggestions include regular tune-ups, checking tire pressure, reducing speed and eliminating excess weight.
While these things can help, Truax said there is one sure way to save money at the pump.
“Drive less — that’s the best way to save fuel,” he said.
Carla Knapp can be contacted at (574) 732-5150 or via e-mail at carla.knapp@pharostribune.com

Want more tips?
The Drive $marter Challenge, launched this month by the Alliance to Save Energy, gives drivers gas-saving tips based on the specific make and model of their vehicles. Visit www.drivesmarterchallenge.org for more information.

Who to contact?
Consumers who believe they have been the victim of unfair gasoline pricing can contact the Indiana Attorney General at (866) 241-9753 or www.indianaconsumer.com. Include details like the name and address of the gas station in question along with pricing information.

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