Wyoming businesses are learning to cope with higher fuel prices and inflation
Gas prices have been on the rise nationwide, the result of several factors, including the effects of the pandemic, supply chain issues and Russia's invasion of Ukraine.
Wyoming's gas prices rose just over $1.20 over the last year with the average cost of regular unleaded topping four dollars and the cost of diesel reaching above five dollars per gallon according to AAA. Unlike other countries, the U.S. hasn't imported Russian oil on a scale as some countries have.
"It's also challenging for the rest of the world because you have more market participants, those participants who used to buy Russian oil are now looking for oil elsewhere," said Rob Godby, an energy expert at the University of Wyoming. "So, you have the same number of people looking for fewer sources, and that is also keeping prices high and potentially could increase them."
"But it also reflects the fact that there's just less competition out there," Godby said. "If you go down into the front range of Colorado, you see the opposite, more stations, more competition. If somebody across town lowers their price, then it's more likely the other stations lower their price and eventually, everybody does. If you have fewer stations, it's less likely that happens."
One of the most obvious industries impacted by this fuel increase is the trucking industry.
"Fuel is usually the second-highest expense a carrier has, it's second only to labor and benefits costs, so any increase in labor or any increase in fuel prices has a dramatic effect on a trucking company," said Sheila Foertsch, Managing Director of the Wyoming Trucking Association.
Many trucking operations are smaller in size and some drivers own and operate their own rigs, she said.
"We could certainly see a rush of small carriers closing their businesses, that wouldn't be surprising to me. That's what happens when we see the cyclical inflationary costs with insurance costs rising and fuel costs rising and it's a triple whammy on small carriers right now," said Foertsch.
But for many businesses, fuel cost increase isn't the only problem…it's combined with overall inflation. Forget Me Not Floral and Gift in Gillette is a busy place this time of year. They're currently preparing for five high school proms in northeast Wyoming.
"Gas prices and all that is just one of those things, so if you've got the volume then you just watch your percentages of increase and you watch your bottom line and then that tells you whether you need to raise or lower costs," said Robert Beck, owner of Forget Me Not. "You would like to pick out one thing like gas, now because that's in everybody's eyes. And freight is another one that's a big item."
Reducing expenses across the board has been an aim for Beck, which he said has paid off and that they're in a better position than they were before the pandemic. However, he conceded that a possible recession could take its toll, especially if the local energy economy is impacted.
State Senator Troy McKeown is a local business owner, operating grocery stores in Gillette and Wright. He's had to raise prices slightly due to inflation, but he said he's trying to be creative to avoid even more increases.
"We're trying to fight it as best we can, reduce the number of times we order from different places and try to get it all on one truck, things of that nature," he said.
Despite cost-cutting measures, he feels that inflation and fuel prices will only get worse.
"One of the things that's hurting us the most is anything that's petroleum-based, for example, the cost of refrigerant," said McKeown. "You wouldn't think it's a big deal, but we use a lot of refrigerants and that's gone up almost 400 percent [from approximately $5 per pound to about $24 per pound]. I guess we just keep moving and attacking wherever we can to help out and stay in business."
Businesses are doing what they can to tackle inflation including fuel without it affecting their customers and themselves but energy experts think prices will continue to increase into the future.