Businesses brace for losses tied to fuel prices

Daily Press Wednesday, April 2, 2003 By JAMES RAMAGE/Staff Writer

Though gasoline prices stabilizing statewide, local companies have had to make difficult decisions

VICTORVILLE — These days, Orlando Mellan's livelihood comes down to pizza and gasoline. For the cook and co-owner of Carpino's, a pizzeria on Bear Valley Road in Hesperia, the price of gas determines how late he stays open and how much he charges for remote deliveries. He's not alone. Local businesses across the High Desert have been dealing with escalating fuel costs by considering or taking painful measures to maximize, or simply earn, profits. For many, the end of high prices cannot come soon enough. "The gas is so expensive here," Mellan said, "The drivers don't want to work." Because his drivers must pay for their own gas, as well as try to make their money through small commissions and tips, their returns are smaller than ever, Mellan said. "Now I must schedule my hours when my drivers will work," he said. Also, Mellan has started charging customers for deliveries outside of Victorville and Hesperia. For instance, deliveries beyond the Mall of Victor Valley or Ranchero Road will cost an additional $2 or $3. There are positive signs though. According to the state Energy Commission, the average price of gasoline in California fell on Monday by 1.3 cents from the previous week. At Hesperia Chevron Gas, owner Sager Fakhoury said the price of gas one year ago was $1.39 a gallon for regular unleaded. Today the price is $2.19. Fakhoury acknowledged that he's marked down the price 10 cents a gallon to get more business, even though it has eaten into profits. If customers pay with ATM cards, where each payment costs his business 45 cents to process, his profits all but disappear. According to Rob Schlichting, spokesman for the state Energy Commission, shipping costs and federal environmental regulations for California — which require gasoline blends that reduce air pollution — account for the nation's cleanest, yet priciest, gasolines. A harsh winter across the country and uncertainty about events in oil-producing countries Iraq and Venezuela have only compounded the problem. Some businesses take comfort knowing that price hikes have affected everyone. "We're paying $2.25 a gallon today, which seems like twice what we were paying several months ago," said Lorraine Chilelli, manager of Victor Valley Florist in Victorville, of her delivery truck fuel costs on Monday. Chilelli's company has had to raise delivery costs in the Victor Valley by $1 a customer. "At least we know that all the other florists have raised their prices, too," she said. James Ramage can be reached at james_ramage@link.freedom.com or 951-6242.