Fuel prices hitting businesses hard

By David Irvin

Burgeoning fuel prices are gouging into budgets of private businesses and government organizations alike.
With no end to the record-high prices in sight, most companies and government agencies are left with little option but to absorb the cost.
In the fourth quarter of 2004, the Burlington Northern Santa Fe railroad spent $397 million nationwide on diesel fuel to power their locomotive engines, according to Lena Kent, director of public affairs for BNSF for New Mexico. That number was up by 41 percent ($115 million) from the fourth quarter of 2003, due to growth, record-high traffic volume and record-high fuel prices, she said.
Because of the record-high cost of fuel, the company is always looking for ways to cuts fuel costs, she said. They have acquired a number of electric-gas hybrid locomotives, adjusted train speeds and set up automatic shutdown procedures for idling trains in an effort to save fuel, Kent said.
According to the AAA auto service club, fuel prices in New Mexico are as high as they have ever been, averaging $2.12 per gallon for regular unleaded on Wednesday. Diesel fuel prices are also at an all-time high at $2.28 per gallon.
Among the hardest hit by increased fuel costs are transport companies, such as Indian River Transport, which primarily hauls milk.
Indian River manager Jack Ross said his company has to absorb the short-term fuel increases when the market jumps. Fuel costs can spike overnight, but because of billing cycles, Indian River cannot change their rates immediately.
“It drives the profits way down, because it takes some time to recoup it (the fuel costs),” Ross said. “As quickly as they raise the price, we can’t recover our costs that quickly.”
Richard Urban, manager of Something Different in Portales, said the cost of gas may forcd the restaurant to increase its delivery charge from its current rate of $1.
Urban understands the dilemma for delivery drivers.
He said one of four delivery drivers in Portales can have seven or eight deliveries on a slow night and 10 to 12 on a busy night. That could easily be 60 miles each night on a car, he said.
“My car used to take $15 to get it filled up,” Urban said. “Now $20 gets me about half a tank. It’s amazing.”
Meanwhile, cities are facing budgetary shortfalls as a result of the high gas prices.
Clovis City Finance Director Don Clifton said the combination of high fuel prices and an increase in emergency ambulance runs between Clovis and Lubbock means the fire department will exceed its fuel budget by about $15,000 this year.
“We definitely didn’t budget enough (for fuel),” Clifton said, noting the difficulty of predicting the commodity’s cost.
The city will have to transfer money around the budget to cover fuel expenditures, so some city operations may ultimately be affected, he said.
The police department and the garbage collection service will also be over budget for the year, he said, but not as drastically as the fire department.
In Portales, law enforcement realizes there aren’t many ways to cut down on fuel usage when there is a responsibilty to patrol areas throughout the city.
“We’re just trying to be as conservative as possible,” Portales Police Capt. Lonnie Berry said. “There’s nothing we can really do. We have to be very visible in the neighborhoods and we have to respond to calls.”
Berry said that the department does remind its officers to be mindful of individual mileage and to turn off vehicles when it’s not absolutely necessary, such as when officers park cars to use radar guns.
For the time being, Cannon Air Force Base has not seen any change in operations due to the fuel price spike, said Andre Kok of Cannon Public Affairs.
“Basically the Air Force plans for fluctuations in the fuel prices, and because of that the recent increases haven’t affected operations at Cannon,” Kok said.

PNT Managing Editor Kevin Wilson contributed to this report.