This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Small Business Feeling the Pinch at the Pump

Anyone who has stared in shock at their gas-station credit-card receipt knows oil prices are headed up.

Any threat to refinery output, no matter where in the world, is enough to make prices shoot even higher. This week, attacks by rebels in Nigeria and fears of a refinery strike in Scotland -- not to mention increased demand from China pre-Olympics -- sent oil to a record price of almost $120 a barrel.

The price surge may be great news for companies such Exxon Mobil (XOM - Get Report) and Chevron (CVX - Get Report), which both report their first-quarter results next week. But it's been terrible for companies that use vast amounts of fuel. Airlines, in particular, have seen their expenses soar as their stock prices plunge. This week, Delta Air Lines (DAL) and Northwest Airlines (NWA), which are preparing for a merger, announced a combined $10.5 billion in losses, blaming record-high fuel costs.

Small businesses may measure their losses in thousands rather than billions, but the toll can be just as dreadful. Right now, business owners across the country are wondering how to pass the cost along to customers without driving away those customers.

"It's a big issue for us," says Richard Kane, CEO of International Limousine Service in Washington, D.C., and president of the National Limousine Association. He's been on the front lines of high gas prices: His company runs 120 vehicles and goes through 1,000 gallons of gas each day.

Although many small-business owners are reluctant to raise prices for fear of sending customers to a competitor, Kane warns that this is not a temporary crisis that can be ridden out. "We as an industry have to pass the cost along to the customer," he says. With regular unleaded gasoline up 26% from a year ago and diesel prices up 40%, there is simply no way to keep eating those costs.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CVX $93.03 0.00%
XOM $83.01 0.00%
AAPL $122.37 0.00%
FB $95.21 0.00%
GOOG $632.59 0.00%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs