Business owners absorb increases

www.saljournal.com Posted at 9:35 AM on Thursday, February 20, 2003 By The Associated Press

At Eagle Communications in Hays, rising gasoline prices are boosting the costs of driving the cable television and Internet company's service trucks. But Eagle isn't planning to pass that cost along to its customers.

"We can't cut service," Eagle president and chief executive Gary Shorman said. "Our customers expect a high level of service. The best you can do is be aware of that excess cost."

With a gallon of gas in Kansas now at $1.61 -- about 51 cents more than a year ago -- Eagle and other Kansas businesses are sucking up the extra costs, at least for now. It's not likely to last forever, and people already paying more to fill up their own cars are likely to also face higher prices for goods and services.

Kansas AAA spokeswoman Amanda Millard said the average gas price has climbed 16 cents since President Bush's State of the Union Address on Jan. 28, thanks mostly to rising anxiety concerning a war with Iraq.

Some of the blame also rests with supply disruptions resulting from a strike in Venezuela.

Anticipating a sharp price increase if a war begins, retailers are trying to boost prices slowly over time to avoid a sudden sticker shock to consumers, Millard said.

Shorman said the company can't avoid the cost of fuel; its trucks have to roll. Eagle has a fleet of about 15 vehicles and offers cable, digital cable and high-speed Internet service to a sprawling area in western Kansas, stretching 170 miles from Goodland to Russell.

He said there is no immediate cost to Eagle customers, but a price increase could come if gas prices stay high.

"Eventually, you have to look at all your costs of doing business being paid for by consumers, or else you're going to go out of business," Shorman said.

Mike Fraser, who oversees Salina's municipal vehicles, echoed Shorman, saying the city can't sideline its police cars, fire trucks and trash haulers.

"It does strain the budgets that we have, but there's not a lot that I think we can do," Fraser said.

He also said gas prices often average themselves out during the course of a year and can also be offset by unexpected savings in other budget areas.

But if prices stay high, he said, the city would have to find ways to use less gas.

Connie Blaszak of Hill City, Minn., didn't let the high gas prices stop her from driving to Kansas City, Kan., where she was filling her van's tank at a Shell station.

While she kept the travel plans she already had made, Blaszak said she didn't plan to make any extra trips.

At ABC Taxi in Wichita, owner Jim Elmore said the gas prices don't hurt him or his riders. It's his 40 drivers who are taking the hit because they pay for their own fuel.