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Some businesses benefit from drop in gas prices

October 11, 2009|By By DAVID M. JOHNSON

BALTIMORE -- The average price of gas in Maryland has plunged more than a dollar compared to last October, allowing some businesses to finally catch up at the pump.

Willis W. Gleason, co-owner of Baltimore's Nobody Auto Transport, said his company's fuel costs to power his three trucks have declined by about $2,000 a week this year.

Last year, "the companies that hired us charged the manufacturers surcharges, but did not pass that down to us," said Gleason, who said the trucks get about 5 1/2 miles per gallon.

Gas prices usually start to drop as fall arrives because demand for fuel decreases, said AAA spokeswoman Ragina Averella. This year, regular is down by $1.05 per gallon, and the diesel used in many large trucks has dropped $1.38 since last October, according AAA's Fuel Gauge Report released last week.

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On Friday afternoon, the average price of regular gasoline at Hagerstown pumps was $2.42 compared to $3.30 one year ago, according to the AAA Web site at www.fuelgaugereport.com.

"We believe gas prices are significantly lower than last year due to sluggish demand and the slow economic recovery," Averella said. "Oil prices are driven by perceived direction of global economy."

Some businesses such as Her Majesty's Service, a vintage limousine company in Baltimore, had to scramble to deal with record-high prices in June 2008. For them, even a penny change in price can mean a gain or loss of profit.

"We never had a surcharge for fuel when prices went way up," said Dean Ray, owner of HMS. "Now they came down and we're back on track."

When gas prices started to rise in 2008, transportation companies had to decide whether to add an additional fee or fuel surcharge to offset the added cost of routine business.

Ray's business was not losing money a year ago, but with a party bus in his fleet and a vintage Rolls-Royce that gets about 12 miles per gallon, he was not making much of a profit, either.

Taxicab companies are another industry hit hard by oil price fluctuations. Baltimore drivers got a break in September 2008 when the Maryland Public Service Commission allowed them to raise their fuel charge for trips.

Since then, gas prices have fallen, but so has demand for cab rides because of the recession. According to Behrooz Jamshidi, owner of Baltimore Taxicab Association, lower fuel prices are helping his company get through a rough year.

"There are less conventions, that used to help us a lot. Now people walk 15 blocks instead of taking a cab," said Jamshidi.

The Maryland Public Service Commission has an ongoing rate case on whether the fuel charge should be lowered, said press secretary LaWanda Edwards, who also said the case might not be decided until December.




Information about gas price averages can be found at AAA's Daily Fuel Gauge Report at www.fuelgaugereport.com/MDmetro.asp.

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