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Zooming pump prices buffet businesses.


L.A. COUNTY - Skyrocketing gasoline and diesel prices in recent weeks have created a few winners, and lots of losers, in the Southland south·land or South·land  
n.
A region in the south of a country or an area.



southland·er n.

Noun 1.
 business community.

Trucking companies, construction companies and trash hauling firms are considering instituting surcharges to help pay for the increased costs of gasoline and diesel fuel.

Meanwhile, Powerine Oil Co., which owns a shut-down refinery in Santa Fe Springs Santa Fe Springs, city (1990 pop. 15,520), Los Angeles co., SW Calif., inc. 1957. The city lies in an oil and natural gas region and has diversified manufacturing. , has emerged as a big winner.

And spokespeople for the Southland's largest supermarket chains said their fuel costs are rising but they have not decided whether to increase prices.

A wide variety of businesses have seen their operating expenses Operating expenses

The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted.
 escalate es·ca·late  
v. es·ca·lat·ed, es·ca·lat·ing, es·ca·lates

v.tr.
To increase, enlarge, or intensify: escalated the hostilities in the Persian Gulf.

v.intr.
 as a result of the rapid and unexpected increases in gasoline and diesel prices. Wholesale gasoline prices have zoomed up 67 percent since January and wholesale diesel prices have increased by 46 percent in the same time period, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 the California Energy Commission The California Energy Commission is California’s primary energy policy and planning agency. Created in 1974 and headquartered in Sacramento, the Commission has responsibility for activities that include forecasting future energy needs, promoting energy efficiency through .

Trucking companies are really hurting, said Maureen Heagney, spokeswoman for the California Trucking Association. "I have not heard of anybody (trucking firm) who has gone out of business, but it is going to happen, there is no question about it."

At Powerine, the refinery which has been shut since last July may now reopen in July 1996, said Al Gualtieri, Powerine's president. Six investors and three financial institutions have expressed interest in putting up $50 million so the refinery can open up again, Gualtieri said.

The refinery originally shut down because refining margins - the difference between what refiners pay for crude and receive for gasoline - were slim. But those margins have improved considerably in recent months - from 21 cents a gallon to 46 cents a gallon, according to the California Energy Commission.

The recent surge in gasoline and diesel fuel prices has spurred a renewed interest in the refinery from lenders and investors, Gualtieri said. He expects to close a financing deal later this month.

The refinery will hire about 300 people if a deal is reached, he said. "We actually started hiring our first people this week," he added.

But things are not so good in other segments of the oil industry.

The part of the industry that distributes large quantities of gasoline and diesel to large customers, such as construction firms, manufacturers and government agencies, is "in crisis," said Jim McCaslin, board member of the California Independent Oil Marketers Association.

There are about 300 gas and diesel distributors around the state and they supply about 70 percent of the gas and diesel to big commercial business and government agencies which consume large quantities of gas and diesel. Distributors, also known in the oil industry as "jobbers" buy large "loads" of gas and diesel from refineries and gas and diesel terminals and transport it to customers that include manufacturers, construction companies, schools and hospitals.

"It's a crisis for a couple of different reasons," McCaslin said. "Supply - it's hard to get product. Prices - the wholesale price of diesel has gone up about 67 percent since March 1.

McCaslin said that distributors are paying higher wholesale prices for gasoline and diesel than gas station owners. "The third reason is credit," he said.

'Load' prices zoom

It now costs gasoline distributors $12,250 to buy an 8,500-gallon "load" of gasoline that they were paying $9,800 for a couple of weeks ago, McCaslin said.

Gas and diesel fuel distributors are finding their working capital is being stretched to the limit, he said. In addition gas and diesel distributors' customers, especially contractors, have been hard hit by rising prices and those customers are having a tough time paying their higher gas and diesel bills.

Companies which perform contract work, like construction companies, have been hit hard by rising fuel costs, because the higher gasoline and diesel fuel prices haven't been figured into a lot of contracts, distributors said.

"The construction companies are crying," said Frank Sauer, owner of Diamond Oil Co., a Montebello-based gas and diesel distributor. "The trucking companies are crying. They say they're going to add a surcharge An overcharge or additional cost.

A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty.
."

Officials of waste hauler Western Waste Industries Inc. plan to institute "a temporary surcharge" on some commercial and municipal customers to pay for rising diesel costs, said Leslie Bittenson, chief operating officer Chief Operating Officer (COO)

The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president.
 of the Torrance-based company.

Diesel fuel accounts for about 5 percent of the company's operating costs operating costs nplgastos mpl operacionales , and the price has risen 42 percent in the last few months, he said. Bittenson said the company had not figured out exactly, what the surcharge would be. "We're working on it," he said.

Bottom line concerns

Many big local companies are still trying to assess what the price of gasoline and diesel fuel is doing to their bottom lines and how or if they should pass along the higher costs.

Spokespeople for Arcadia-based Vons Companies Inc. and Compton-based Ralphs Grocery Co. said those companies had not decided whether to pass rising costs on to customers as higher grocery prices.

"If the price (of fuel) keeps going up, it's a definite factor we are going to have to address," said Doug Hendrix, Vons spokesman.

The Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850.  Convention and Visitors Bureau also is not sure what impact gas prices will have on tourism, said Carol Martinez, bureau spokeswoman. About 43 percent of L.A.'s visitors arrive by car, she said.

"We don't think it will have a big degree of impact on summer travel" to Los Angeles from distant parts of the country, Martinez said. But she added officials are concerned the higher gas prices could affect long week-end trips by visitors from nearby cities such as San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden  and Phoenix.

Upbeat Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States.  

In Las Vegas, where about a third of the visitors come from Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , and most of them by car, there is not a big concern about gas prices, said Rob Powers, spokesman for the Las Vegas Convention and Visitors Authority The Las Vegas Convention and Visitors Authority (LVCVA) is a public agency that runs the Las Vegas Convention Center, Cashman Center, and Cashman Field and is responsible for the advertising campaigns for the Clark County, Nevada area. .

"Our concern is more one of (gasoline) availability than price," Powers said. People may not want to drive long distances if they are concerned about being able to buy gas, he said.

"In some ways we could see a benefit" from higher gas prices, Powers added. During the Persian Gulf War Persian Gulf War
 or Gulf War

(1990–91) International conflict triggered by Iraq's invasion of Kuwait in August 1990. Though justified by Iraqi leader Saddam Hussein on grounds that Kuwait was historically part of Iraq, the invasion was presumed to be
, Las Vegas experienced an increase in visitors because more Southern California travelers wanted to drive short distances - to Las Vegas, he said.

The Southern California Rideshare hotline is another beneficiary of higher gas prices, said Jill Smolinski, spokeswoman for Southern California Rideshare, a division of the Southern California Association of Governments.

Commuters who call the hotline (1-800-COMMUTE) are matched with other commuters looking for Looking for

In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with.
 carpool car·pool  
n. also car pool
1. An arrangement whereby several participants or their children travel together in one vehicle, the participants sharing the costs and often taking turns as the driver.

2.
 partners, she said. That service saw an 8 percent increase in phone inquiries in April from March, Smolinski said.

"People who are calling are calling because of the price of gas," she said. "They are saying they don't want to pay it."
COPYRIGHT 1996 CBJ, L.P.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:fuel prices
Author:Mullen, Liz
Publication:Los Angeles Business Journal
Date:May 6, 1996
Words:1126
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