Soaring gas prices impact local business

March 7, 2011 8:44:54 PM PST
With the average cost of regular, unleaded gas in Chicago up to $3.71 a gallon, operational costs for businesses are going up.

At a gas station in the South Loop the price for a gallon of regular, unleaded is $3.99. But it's not just motorists who are paying higher prices.

"Most of our flowers come from South America, and then they fly them to Miami and then they fly them to Chicago. Or they fly them in from California," said Margot Sersen, LaSalle Flower Shop. "If this keeps going for another month or two, I'm sure we'll see an increase."

Much of Sersen's business is done by delivery. So costs are going up there. But she's also susceptible to her suppliers raising prices because of what it costs to get the flowers to her.

So far, everyone is holding the line. But how much longer can they continue to do so? It's the same question that a River North restaurant owner is asking himself, especially with food prices going up and up. And that's just the beginning, he says.

"That shoots up all the plastics, all the packaging. And then of course the suppliers tack on service charges. The drivers suffer because gas prices are higher, but it's hard to pass that along to the customer," said Ali Jaffer, Rosatti's Pizza.

Like LaSalle Flower Shop, two thirds of Rosatti's business is delivery. In the last two weeks alone their operational costs have gone up 12 to 13 percent just because of the increase in oil prices.

As for motorists, AAA has two useful suggestions for people to cut down on their fuel costs: carpool and consolidate trips, and run errands on the way to picking up the kids from school.

Outrage among drivers is growing.

"It's terrible. I'm going to start catching the bus again," said Taquire Plummer.

"I commute back and forth every day and I have to pay for gas. I'm spending anywhere from $75 to $100 a week on gas. You do the math. It's a car payment," said Joe Bonaparte.

There's increasing pressure on the Obama administration to bring down prices by releasing oil from the strategic petroleum reserve. More than 700,000,000 barrels of oil is stored there. But it's supposed to be used only in an emergency.

On Sunday, the president's chief of staff Bill Daley said using some of that oil is being considered.

There are those who believe the danger to the economy from rising gas prices is reason enough to break into the reserve.

"I think we need to put on the table everything including dipping into the reserves to avoid that," said U.S. Rep. Jan Schakowsky (D), Chicago & North Suburbs.

"I don't think we should open up the strategic petroleum reserve. That's for a national emergency. What we should do instead is resume drilling in the US, especially offshore drilling," said said Sen. Mark Kirk (R-Ill.).

All agree that using the reserve is at best a short term fix.