- March 9th, 2011
- Jackson Parker
More Businesses Report Rising Gas Prices Affecting the Bottom Line
I filled my gas tank up this morning in San Diego. It was $4.21 for a gallon of regular unleaded. Premium gas was well over the $4.50 mark.And it’s only March! Yikes! Gasoline prices typically fall in the winter and rise in the spring as refiners switch to more expensive summer blends of gasoline. Since 2000, prices in May have been 52 cents per gallon on average higher than in February, according to the Energy Information Administration. Right now, California averages the most expensive fuel at $3.90 per gallon.
High gas prices can be a tough burden on small businesses. The recent surge is now putting pressure on already-price-conscious consumers and small businesses that rely on fuel to keep their businesses up and running. The situation is forcing tough choices on small-business owners who are reluctant to charge more for fear of losing cost-conscious customers.
There is a psychological effect of increased gas prices, as it creates more uncertainty and anxiety for small businesses. No one knows how high it will go. This is definitely on everyone’s mind. For example, Blank Label, a Boston-based start-up that sells customizable men’s shirts, told Inc Magazine that he has already seen quarterly 10-15 price increases from DHL, their shipping partner, in addition to higher input costs from the rise in price of raw materials. Like many retailers, Blank Label is seeing the rise in the price of gasoline affect their bottom-line. “There’s definitely quite a bit of margin pressure,” says Fan Bi, the company’s founder.